Traditionally, the business of wealth management is based on personal relationships and trust as client engagement involves several individuals and manual processes. The clients deal with an investment advisor who is supported by the middle and back-office staff – the opening of accounts, transfer of money and transactions are all performed by various individuals and thus prone to human error. While it appears to be a smooth functioning place to an outside observer, in reality, it’s hardly ever the case.

The current business model has poor scalability and efficiency – according to McKinsey, the need of the hour is a next-generation operating model that is supported by Data, Analytics, and Technology. The pandemic has catalyzed this inevitable change since it caused a shift towards digital modes for sales and delivery of advisory services. The clients seem to have accepted the change too and expect the best of the changes to continue post-pandemic.

We are currently at a juncture when the industry’s business models are getting disrupted, with digitization accelerating the change. Here are a few of the several drivers bringing changes to the world of wealth management.

Data & Analytics

The wealth management industry seems to be behind the curve in terms of the adoption of Data & Analytics. However, leveraging D&A for different business processes such as client advisory, portfolio building &management, risk evaluation, etc. could significantly enhance the value delivered by wealth management firms.

Data analytics benefits advisors and clients alike – better analytics and visualization tools can add value to the vast amounts of data that advisors deal with. Leveraging advanced data analytics tools and techniques, wealth management organizations can generate meaningful and actionable insights for their clients to make informed investment and business decisions.

Cloud Adoption

Most wealth management firms struggle with the complexities and inconveniences of legacy software systems – cloud computing allows for modernization without changing the IT landscape completely in one go, as it can be implemented in a modular manner.

The pay-per-user function also transforms the way in which wealth management firms create and offer customized applications and services.

Future-forward firms have begun planning their cloud transformation strategies, as they are well aware of the challenges involved in implementing one, while simultaneously being convinced of the many positives it brings, including the ability to help Wealth Managers use their resources more efficiently, plan their budget management and allocation, and help the organization to obtain flexibility by building an enabling IT infrastructure.

Robo-Advisory

Robo-advisors are defined as digital platforms that provide automated, algorithm-driven financial planning services with little to no human supervision – they collect information from clients about their financial situation and future goals through an online survey and then use the data to offer advice and automatically invest client assets – thus, they are also called Automated Wealth Managers.

They are an attractive option for young investors who don’t have a large sum to begin investing with, who don’t necessarily need the face-to-face human interaction and relationships that the older generations prize, and who would rather not spend a lot of money on wealth manager fees.

RegTech

Complying with industry regulations is a high-risk area for wealth management firms since any failure on their part can result in financial losses in addition to costing them their reputation as well as punitive measures by Governments. Firms have begun to employ technology to perform functions such as due diligence, transaction monitoring, regulatory reporting, data management, and so on to reduce regulatory risks as well as costs.

RegTech, or Regulatory Technology, not only eases the burden of compliance for wealth management companies but utilizes AI, data mining algorithms based on machine learning, offers services on the cloud and integrates with existing systems in organizations through APIs to make it easier for firms to adopt new technologies.

In conclusion, digital transformation services are already underway in the wealth management industry. However, the successful transformation and adoption would require the organization to adopt it with an open mind. Technology adoption may be risky, but those firms that can adapt and embrace the change would fare better in the long term.

Black Rock IT Solutions is a digital transformation service provider with over 14 years of experience working with clients from the Financial Services industry. We have been instrumental in the digital transformation journeys of several firms, equipping them with the advantages of D&A, AI&ML, and Cloud Adoption to build a more future-proof business. For instance, blackrock proposed a data analytics-powered investment advisory services platform as a solution to the challenges a leading wealth management firm in the US faced. Designed with an intuitive interface on Web, Desktop, Android, and iOS devices, the investment advisory services platform helped its users to manage different kinds of investment portfolios seamlessly. Read the whole success story here.

If you are looking for a reliable IT-partner who understands your domain, drop a mail to sales@blackrockdxb.com.

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RPA – Robotic Process Automation – is a software-based technology that enables computer systems to be configured to replace iterative human actions in a business process

Process Automation robots use the UI of an existing system to capture data and make changes to applications just like humans would. They can interpret this data, trigger responses from the system, and communicate with other systems to perform a wide variety of repetitive tasks. Unlike humans, Process Automation robots never sleep and never make a mistake, making the potential for error-free efficiency infinite.

This technology plays a crucial role in automating repetitive tasks at workplaces in all industries. It is estimated that up to 60% of work in an organization such as high volume processes, repetitive tasks, digital processes, activities with minimal human interaction are ideal candidates for automation. 

Use Cases in Education:

Automation would take highly repetitive, monotonous work out of the way for teachers, faculty, and other academic staff alike, allowing them to focus their energies more on the things that truly matter while ensuring that the routine administrative tasks are performed error-free. Automation in education can remove several hurdles that educators are faced with that steal away precious time – tasks such as keeping track of a student’s progress, grading and attendance management can easily be taken over by automation bots. 

Here are some academic use cases that robotic process automation can revolutionize in education:

Tracking course progress – Set empirical goals for faculty and students and track their progress automatically with KPIs. Send alerts and warnings for missed targets.

RPA enables Universities to track course progress based on the original lesson plan designed by faculty. Empirical goals can be set by the University for faculty and by University and faculty for students. RPA enables the institution to track deliverables and deadlines for students, as well as course progress. It can provide early reminders for upcoming tasks in addition to alerts and warnings for missed targets. 

Student activity monitoring – Analyze the time students devote to individual subjects/ topics and help them optimize their study-schedule.

Student progress and performance can be tracked with RPA. Students who are found to be weak or poor performing in certain courses or modules can be identified. The system can reach out to those students and enquire if they need assistance. It could also provide suggestions for self-improvement in addition to alerting faculty in cases where external assistance is needed such as identifying and engaging tutors for specific modules.

On-screen evaluation – Auto-scan answer sheets, calculate scores, generate results, and send out scanned copies of evaluated answer sheets.

Exams, both screen-based and paper-based can be evaluated using RPA, based on inputs provided by faculty. Paper-based exams are scanned and graded by the system with minimal external assistance. RPA can calculate and generate scores which could then be updated in the database as well as student portals. The process can free up faculty time as well as generate results much faster.

Several other tasks could be taken over by RPA: enrollment process, monitoring student/teacher performance, regulatory compliance, library management, timetable updates, exam hall seating arrangement, player/team selection in sports, etc.

Tangible benefits of RPA:

• RPA is more accurate

RPA systems can be implemented for routine, mundane tasks such as student enrollment, attendance management, and tuition fee collection – there will be no hassles around missing payslips or data that has been entered wrong, as RPAs can handle these processes seamlessly and in an error-free manner.

• RPA sticks to regulations. 

With systems that are empowered with RPA,  it is easy to ensure compliance – they execute their tasks reliably and reduce compliance risk. As long as they are programmed to operate according to existing regulations and standards, they will never step out of line. This makes using RPA one of the easiest ways to certify that the school or university complies with all existing standards for quality assessments, improving the chances of going up on the scoreboards for best institutions in a given region.

• RPA saves money

 RPA can reduce processing costs by up to 80%. They will exhibit a positive return on investment in no time and can result in further accumulative cost reductions of up to 20%, over time. The initial investment is therefore completely justified, and the savings garnered can be invested elsewhere such as towards improving infrastructure, or improving compensation for employees while reducing the workload. 

• RPA is super scalable.

Unlike humans, RPA-empowered software systems are excellent at multitasking – they perform massive amounts of operations parallelly, in both desktop and cloud environments. So no matter how large the project or the institution, or the rate at which it grows, the RPA is capable of scaling alongside it and providing the same level of efficiency consistently. 

• RPA increases productivity.

Relieved of the burden of monotonous, no-value add tasks, employees are freed of the pressure of repetitive tasks and can engage more meaningfully at the workplace, increasing productivity and boosting morale. Educators can focus on bettering their methods or can engage their students more, instead of wasting precious time stuck in front of systems, forced to work on routine admin tasks. 

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In the first six months, the global revenues for payment systems declined by an estimated 22% when compared to the same period in 2019. According to BCG, from 2019 to 2024, the global payments revenue is likely to increase by around 1% to 4%, depending on the speed of recovery from the pandemic. However, even in a best-case scenario where the rebound is quick, the expected growth rate would be half the rate of the prior 5 years. 

However, in the past six months, e-commerce, digital payments, and other online services have all registered excellent growth. The pandemic has reshaped how consumers and businesses interact with each other and this will shape the future of the payments industry. 

Here are a few of the trends that were observed during this time.

Cash to Non-cash conversion

Even countries that have been traditionally cash loyal have experienced a drop in the use of cash for transactions and have seen a rise in digital payments. For instance, the UK has seen a 50% drop in cash usage in March 2020. Payments made in-person are reducing every day, as people are being encouraged to stop handling cash to curb the transmission of the virus. In fact, most businesses encourage contactless payments, with some going so far as to not accept them at all. 

Electronic peer-to-peer and consumer-to-business payments have experienced growth during this time. Debit cards, normally associated with lower value transactions, have also exhibited growth. On the other hand, ATM transactions and cash use had experienced a decline during the same period – In India, ATM usage fell to almost 50% and a steep decline was observed in the UK as well. It was estimated that transactions executed via cash will decline by 4 to 5% during this year, which is around 4 to 5 times the annual decrease experienced during the last couple of years. 

Boost for e-commerce 

The pandemic forced a significant percent of the population to shift towards digital channels for their retail purchasing activity. Industries that depend on travel such as hospitality and tourism as well those that depend on density such as entertainment are likely to be unfortunate casualties in the short term, based on how the crisis has been progressing. However, niche segments such as fresh food, pet supplies, in-home entertainment, and so on are expected to grow at better rates. In the retail sector especially, a shift in buyer behavior was observed with customers moving from brick-and-mortar to online retail shopping. This was evident from Amazon’s second-quarter numbers that recorded a 40 % Y-O-Y boosted by the growth in grocery sales. 

This shift in consumption could also lead to a shift in the payment method used. For instance, in place of using credit/ debit cards, consumers could shift to contactless payment modes such as digital wallets or cryptocurrencies.

Move from “physical” to “virtual banking”

Banks in various parts of the world are closing branches either temporarily or permanently due to the current scenario. This has been aided by the adoption of technologies for real-time payment facilities.

In the words of Deepak Sharma, Chief Digital Officer at Kotak Banks, India – “Ninety-five percent of transactions moved out of branches post-COVID. Unless there is a great need for customers to visit branches, we don’t see it happening (again anytime soon). “

“We have also seen fast adoption of WhatsApp banking and conversational banking bots. Very soon, we will see (these changes apparent) while doing small business transactions and loan origination as well. Even after we come out of COVID, this shift in habits that we (have seen) will continue,” he added.

Cross-border payment flows severely affected

Because of lockdowns introduced by Governments, international travel came to a grinding halt causing a massive decline in international transactions. This was further worsened by waivers offered on the transaction to boost demand. Inter-regional trade had a deeper impact than intra-regional which further hurt cross-border payments, while at the same time the prices of commodities such as oil dropped since demand declined. This had a 2-fold effect on the transaction values since both the volume as well as the unit price dropped. 

To conclude, crises often create an opportunity for firms to take a good look at how they conduct business. COVID-19 is no different except for the speed at which it has managed to affect change. Payment systems have been forced to accelerate and meet the challenges raised against them. The most talented firms that adapt to the situation, leap ahead of the competition, and deliver exceptional value to customers will survive and shape the industry.

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In theory, managing multiple brands is a good strategy for a CPG/FMCG/Retail company or any business in the B2C space. A varied product portfolio across different price brackets can reduce investments in overlapping product development and marketing efforts. Having a multi-brand portfolio can prevent competition from attaining a higher market share for the same type of products. This strategy can also increase healthy competition between various brand managers, leading to growth in sales figures.

Companies can also experiment with different brands in the portfolio by killing off weaker or ill-fitting components from the product range, thus freeing marketers to focus resources on stronger brands. Such brands will be positioned strategically compared to competition. This effectively reduces the complexity of marketing effort, and counteracts decreasing efficiency of traditional distribution channels.

The Reality

However in practice, B2C companies today face a tough challenge. Sustaining multiple brands in a demanding market with fragmented customer needs is not easy. Many brand managers today feel the need to cut down on their brand portfolio. This is easier said than done. Most companies and managers who work for them often react to this pressure by expanding rather than pruning their brand portfolios.

Role of Brand Managers

Brand managers play a very crucial role in deciding which brands to cull and which to promote. If a manager kills off an unproductive brand, it would mean the remaining brands in his portfolio must capture the affected brand’s volume in order to break even! The worst fear of businesses therefore, is making the wrong call and losing important market presence. This is apart from the fact that companies can punish brand managers for missing out on an emerging market-opportunity.

Technology Solutions to Portfolio Management

Many B2C giants in the recent past have reversed their traditional cautious approach and used the latest technology solutions for brand portfolio management. For example, Procter & Gamble has rolled out a successful global corporate strategy shift over the past few years that is also combined with digital power. They had a shake-up of their product portfolio, where they consolidated some product portfolios while others were pruned. Several other companies such as PepsiCo, Unilever and Nestlé have achieved rates of revenue growth two to five times greater than historic norms and saved 20% of overall marketing expenditure by managing brand portfolios much more effectively using digital innovation.

As per an article that was published by Huawei recently, customers now have new methods to communicate with companies and agile businesses can take advantage of opportunities to create new engagement platforms and expand the types of services they offer. Procter & Gamble has taken complete advantage of this situation. P&G is one of the largest B2C companies in the world, with annual sales of US$65 billion and operations across the globe. Despite being in business for 180 years, mobile has created one of the largest disruptions the company has experienced. (Read More)

How did these companies accomplish it?

They did it in part by establishing clear roles, relationships, and boundaries for their brands and then, within these guidelines, giving individual brand managers autonomy over not just branding and marketing but also over auxiliary activities such as product quality, packaging and even creating a memorable unboxing experience. Only Portfolio managers responsible for the portfolio as a whole would supervise these brand managers.

In addition to this, since new portfolio strategies frequently prompt reactions from competitors, in order to mitigate any unanticipated consequences, companies have opted for a robust data analytics system that highlight unexpected shifts in real time.

Of late, mobile technology has transformed everything from logistics to marketing. The advantage of mobile technology lies in its capability to expand reach of products among the target market. Moreover, the prevalence of internet makes it easier for the field sales staff to use applications that can collate market data, which can then be used to draw insights.

As per a recent report by BCG, “Demand-centric insights can help companies identify which of their smaller brands, if properly repositioned, enhanced, and extended, have growth headroom. In our experience, many small brands have an avid following that can be expanded by more clearly targeting them at attractive demand spaces. For these, added complexity is worthwhile. Brands lacking demand headroom are candidates for complexity reduction or divestiture.” (Read More)

Solutions that help Brand Managers

FMCG companies often focus on innovating the existing product portfolio while developing new ones. And brand managers have to be updated in real-time with all the vital market data and dashboards 24X7. For brand managers to succeed, they must master the technique of launching new products into the market at the right time.

“Large FMCG businesses are increasingly using data insights to manufacture better products, improve sales and the revenue per customer.”

This entails that brand managers adopt newer methods of data consolidation and visualization to understand, predict and prescribe new products that can sell. Technologies such as BI Analytics can be leveraged to find gaps in the market that will help launch or prune products.

Role of Mobile SFA in Brand Portfolio Management

Technology plays a huge role in successful product portfolio management. All key decisions that are going to be game changers are taken only after careful and in-depth analysis of several months of collated market data, trends, parameters, and demographic data among other metrics.

A major requirement/tool in the hands of the brand manager would be however, a centralized information system (CIS) that can analyze market data from various sources. Any modern Sales Force Automation System (SFA) can be used to collate such important data. Such a system would be a combination of a mobile-based information collection application to be used to collect data from the field, and a web/desktop based system with Business Intelligence capabilities that can analyse the data collected.

Mobile SFAs can act as the windows through which brand managers extract vital data from the field related to brand performance. They can also monitor resource performances from a grass roots level. SFAs feed valuable information such as sales promotion results, customer feedback, dispatch delays/mismatches, and so on to the support team working for the brand. This data can then be analysed with historical sales and production data to make quick decisions/actions. In addition, SFA systems help brand managers monitor demographic data with which they can align regional teams towards overall brand goals.

Conclusion

Many new Mobile SFA solutions providers are adding Business Intelligence, Machine Learning and other such AI-based applications into their product portfolio. It has become easier for managers to collect and analyse data using such advanced solutions that can provide a 360 degree view of all their brands, as well as monitor market performance of each brand real-time. In future, we would be able to use solutions that provide predictive or even prescriptive analysis of data.

Brand Portfolio management is always a rigorous and continuous process for any FMCG/CPG organization. For companies to succeed, setting the right portfolio strategy is absolutely crucial. Adding correct technology aids will help portfolio managers at the right time (the earlier the better) and can pay big dividends into the company’s bottom-line in the medium and long term.

Lastly, it has to be remembered that getting strategy and technology right is only part of the battle; companies must also make organizational changes if they are to adapt their brand portfolios quickly to match shifting trends, competitive responses, mergers, and new-product launches, while also managing the natural lifecycle of their existing brands. Since taking action with one often means doing so with another, companies must look into employing a skilled brand portfolio manager who can lead individual brand teams. This will be a person who can collect, understand, analyse data from different sources and create coherent logical solutions from them.

blackrock has been working with world-class businesses in the FMCG/CPG sector to help them grow sales, engage field sales teams, grow market reach and enhance connection with the retailer. To know more about how blackrock uses digital technologies to boost FMCG sales, write to us today at sales@blackrockdxb.com

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