For managers operating in numerous markets and channels, workflow management systems can be an enormous help, finds Nick Fitzpatrick.
There is usually nothing remarkable about a client phoning for a valuation or going online to look for it. But if the fund or mandate is an underperformer, then the sharper fund management firms may suspect that the client is heading for the exit.
Data analysis tools are giving firms the ability to do this. In effect, they are used to work out whether clients are happy. Using these tools across thousands of customers at an international level could play a large part in meeting the global distribution challenge.
Workflow systems can track phone calls, service requests and valuation requests to build up a picture of overall client satisfaction, whether in respect of performance or broader operational issues such as reporting, pricing or plain old website responsiveness.
However, the data can go much deeper than the big picture. It can be used to clarify exactly where dissatisfaction is strongest, perhaps at the geographic level or the client segment level. Or both.
Firms then know exactly where to allocate resources and this, for fund managers operating at a global level, potentially means a tremendous gain in efficiencies.
“People are taking more and more of that data to try and understand where they could have client issues coming up, and predicting them, to get on to it early and not wait for a client to terminate,” says Neil Curham, executive director at asset management consultancy Alpha FMC in London.
It’s not all about preventing outflows, though – the technology can be used to enhance inflows. Robeco, the Dutch asset management group, has been using automated web-based analytics to this end – particularly in the retail channel, where distribution has been entirely online since 2012.
Web visitors looking at a Robeco fund three times in two weeks are sent supplementary information (such as a fund manager webinar) if data shows they are not invested in that fund.
As Monique van Wensem, head of retail marketing and sales at Robeco in Rotterdam, told Funds Europe (issue 139, September 2015): “We see that [web analytics], which is purely automated and based on behaviour, has a conversion rate of almost 10%, which is very high.”
It is a cost-efficient way to service customers and, being based on customer interests, is more client-centric, she added.
VITAL INTELLIGENCE
Back at Alpha FMC, Curham says a large number of firms are looking to implement workflow management tools.
These systems – offered by the likes of Pegasystems and IBM, among others – manage processes end-to-end. They ensure enquiries don’t get lost in email systems or local databases, but instead become part of the vital intelligence picture.
“What firms are looking for is when there’s a flurry of valuation requests from a certain client or type of client, or where there is a known pricing issue in a fund and firms can start to understand how clients respond to it,” says Curham.
“In the past, that valuation request would have been recorded on a CRM [client relationship management] system, processed and fulfilled, but not actually analysed afterwards.”
Essentially, fund management firms can gather a mountain of data by capturing client activity that was always happening anyway, but can now be expressed in a useful format.
Curham says some asset managers are starting to catch up with other financial service providers, who have been more advanced in carving out digital solutions for sales and customer retention.
But this data-driven distribution capability at a global level is generally available on a cost-efficient basis only to firms with a large enough scale to make it pay.
“It is difficult for mid-size fund management firms to do this in a cost-effective way,” Curham says.
These tools are not cheap, and medium-sized players may not have enough clients to generate enough meaningful information from them.
“There are a number of firms that have the ambition and intent to double in size. If you want to operate at a global level, then you have to be of a certain size to stay in the game,” Curham adds.
That doesn’t mean the mid-size player can’t benefit from these processes. One great value of this technology is it creates the impression a firm has more people stretched out over the globe than it does in reality. At some point, the clever analysis has to translate into action, and a firm needs to provide the personal touch. After all, the systems are not replacing humans, and asset management is still a people business. The benefit to firms with fewer people is they can better prioritise areas of importance.
THE BEST BITS
Any globalised firm is not likely to have or want – especially if it’s a less scaled player – people and offices in every location it distributes into.
In Asia for example, the different markets will require an asset manager to have sales, business development and relationship management teams capable of having nuanced conversations across a broad range of products.
Large firms will have skilled people who provide the best way to manage large relationships and open up new markets, but the teams can now be backed up with data-driven analysis to make the distribution push more efficient.
This mix of tech and people is a new model for some managers working in distribution at the global level.
“The traditional way of distribution was to have a fairly large sales force and relationship management team and to run fairly unfocused events and marketing. We’ve never, as an industry, been good at segmenting the market from a distribution point of view,” says Curham.
“What is happening now is people are pulling out the best bits of that – the relationship management and business development guys – and making them very focused on what they are doing, not having as massively broad a remit as they did in the past, and then using different tools and techniques to support them.”
Working at a global level with distributors is a challenge for asset managers. Technology is of increasing use, but people are still needed. As management firms catch up with tech trends elsewhere, they could be finding these people are deployed more efficiently.
©2015 funds europe
