Asset Management Firms Are Still Measuring Digital Success in Analogue
In Alpha FMC’s 2022 Asset Management Digital Readiness Survey, we identified a number of key challenges, drivers and outcomes from Digital initiatives from 40 Managers across the globe, with a combined £22 trn AUM. One of the key areas flagged by clients was the ability to really understand and measure the success of their digital strategies, to move on from a world of measuring digital in “analogue” ways and to start gaining real insight from the Digital tools they deploy.
Measuring the success of different digital transformation efforts across a firm (e.g in Client Service, Operations and Marketing) requires firms to use a range of different measures in order to quantify a range of different outcomes (e.g. commercial benefits, efficiency, risk reduction, productivity etc). A key, undermeasured outcome is that of the commercial benefits, where firms are not currently able to successfully measure the increased ability to find prospects, win new business and cross-sell products to existing clients.
How are Asset Managers Measuring the Commercial Client Value of Digital?
Digital success in this area, for most Asset Managers, focusses on the servicing of clients more effectively and driving AUM. Specifically, through the lenses of client satisfaction, attracting new revenue and retaining clients. When we look at what firms are actually measuring, they are not keeping this focus in mind.
Whilst client satisfaction is measured, the more commercial aspects are not. Instead, firms tend to measure reductions in risk or improvements in efficiency internally. This totally misses the measurement of the key benefits of digital that firms are trying to realise.
We also see digital marketing teams measuring specifics across different channels as measures of success e.g. click through rates, website hits, document downloads, etc. but these are broad measures which are being used as proxies for digital success, which do not align to the desired benefits and provide limited insights which can drive revenue.
What Would Nirvana Look Like?
In a perfect world, firms would like to be able to allocate revenue to Digital initiatives and to report that an initiative has delivered X number of wins or dollars in assets won or the role in retention. In reality, our sales processes and business cycles are complex and non-linear – it simply isn’t possible to do this in anything other that the simplest of business models.
The Client Experiences that clients are demanding are also across multiple channels, adding further complexity to the digital landscape and determining how to measure success.
What Should Firms Do?
To measure digital success more effectively, firms need to consider the impact on a client-by-client basis. Given the different needs and behaviours of different clients, they need to be measured individually to drive real insight.
We are now seeing leading firms build on the analytics available on their digital platforms and expand on them by feeding them into analytics engines. These collate individual client data and pull it together to build a better picture of individual clients.
Building this capability opens up a range of data-led insights currently unavailable to organisations. Understanding and aggregating how clients are engaging with the firm enables marketing teams to understand what is effective, product teams to identify gaps or issues within the product range, or Sales teams to understand their clients better. Sales teams can use this insight to understand the interests of their clients, to be notified of unexpected spikes in interest for individual clients, or for new contacts to be identified.
Many of the tools that firms require to build this capability are already available in-house. Firms now need to set a vision for analytics across the organisation and build their coalition to organise around the next generation of digital analytics.