How client data integration can shield financial firms against disruption

Digital technology and transformation leader speaks out on the opportunities and challenges for advisors

How client data integration can shield financial firms against disruption

Traditionally, success in the wealth industry has been measured purely in terms of client growth and assets under administration or management.

But in a world of ever-increasing technological adoption, digital transformation, and rising service expectations among clients, wealth firms and advisors could be undervaluing another precious resource within their enterprises: client data.

Wealth Professional spoke with Kâl Salem, digital technology and business transformation leader at Incloud Business Solutions. Salem, along with other experts from IG Wealth Management and Salesforce, will talk about disruptive trends shaping the wealth industry, and how focusing on data can help wealth professionals and firms adapt, in an upcoming virtual panel discussion.

Wealth Professional: Why is it more important than ever for advisors and firms to integrate client data into a central location?

Kal Salem: Integrating client data in a centralised repository is critical for business growth and achieving KPI metrics. Investment firms, regardless of headcount or AUM, provide a comprehensive suite of financial services to their clients.

A key strategy for account growth is identifying and closing cross-pollination opportunities. A client that has $1 million in AUM can be converted to a more than $5-million client if data is centralised and advisors have insights in to where assets and liabilities are being held. For example, a client may have 5 investment properties with 5 separate mortgages and 5 separate institutions.

Data which informs the advisor on potential consolidation opportunities is an integral mechanism for advisor success.

WP: Can you talk about some common challenges among firms you've seen that get in the way of that?

KS: Many firms have siloed business practices, which gets in the way of data sharing and visibility across units. Similarly, most advisors work on their own books of business and want control over client data, leading to fragmented data models and inaccessibility.

Some firms may have the technological pieces in place for client data integration, but could not follow through because they underestimated the importance of a change management program. Others don’t take the time to define what centralized data means, and what its role is in their business’s success.

Another possible hurdle is the failure to plan for scalability – for example, having an MDM approach in place for mergers and acquisitions.

WP: What are you looking forward to in the upcoming webinar session?

KS: I look forward to touching on a few important questions, including:

  • How has the pandemic and societal shifts impacted relationships between investment advisors, firms and their respective clients?
  • How are investment firms preparing for the next 3-5 years? What are their thoughts on the current industry volatility?
  • How will the push for democratization of data impact their business practices?
  • What impact will CBDC have on financial planning?

InCloud’s exclusive free-for-advisors webinar, titled “Disruptive Trends in Financial Services: How to Adapt & Grow”, will be held on December 1 at 12 PM ET.