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A hyper-personalized wealth management client journey is becoming table stakes

November 20, 2020

Will BigTechs aggressively enter wealth management? The jury remains out. But when we consider that Amazon has moved into insurance, eight FIs have signed on as Google checking account partners, and Ant Group’s Yu’E Bao fund is a global behemoth ‒ competition in wealth management may be imminent.

What makes the industry vulnerable to Big Tech advances? Its Achilles heel, the lack of personalization.

The World Wealth Report 2020 analyzed high-net-worth-individual (HNWI) perceptions about wealth management firms versus BigTechs across client journey touchpoints. Two observations stood out:

  • HNWIs said they were least satisfied with their firm’s personalized information or services, with more than 60% reporting unsatisfactory experience.
  • HNWIs believe BigTechs offer more personalized information/ services than incumbents. They said BigTechs outperform wealth firms in five touchpoints related to information access or value-added services.

Figure 1: A boost in WOW factor can help wealth firms shore up vulnerable touchpoints

Source: Capgemini World Wealth Report 2020.

Thanks to technological advances, BigTechs have been redefining CX benchmarks for hyper-personalization. And HNWIs have taken notice. But, so far, the wealth management industry has been unable to catch up.

Wealth clients want personal treatment, especially during life transitions

Less than half (»45%) of the HNW clients we surveyed in 2020 said they were satisfied with their firms’ personalized offerings. Another miss for wealth managers is the acknowledgment of HNWIs’ unique needs at key life transition points ‒ marriage, family expansion, retirement, estate distribution.

In the backdrop of today’s great wealth transfer from baby boomers to their children, firms have opportunities to engage the younger generation just entering the HNWI segment and older clients planning to pass on their wealth.

Notably, however, less than half of younger HNWIs (under 40) are satisfied with how firms meet their inheritance management needs, offer education about investments, or share financial advice at critical life stages. Similarly, only around a third of senior HNWIs (age 60+) are satisfied with their firms’ trust/estate management services or assistance with new digital tools.

Technology will play a defining role in determining financial services winners and losers, according to a trends update from Fenergo ‒ and scaling new personalization heights will be critical.

What is the next personalization frontier?

With vast power to leverage data, technologies such as artificial intelligence (AI) and analytics will enable firms to offer individuals hyper-personalization throughout their client journey. Super-detailed risk profiles will be possible, as well as personalized portfolios, advice, and tailored product recommendations based on analysis of each client’s past behavior and preferences.

For instance, Charles Schwab’s Project Bear uses AI to scan its client base for investors who may react to market volatility in a way that won’t ultimately help meet their goals. Schwab consultants reach out to these clients to discuss options.

With the help of APIs, firms can provide more comprehensive client reporting by offering HNW individuals an aggregated view of all their financial relationships in one platform. Multi-channel engagement will allow communication personalized to client convenience.

Figure 2: Technology-driven hyper-personalization

Source: Capgemini World Wealth Report 2020.

Well begun is half done

New technologies can certainly make the most of a firm’s data. However, a critical but often-neglected first step is to build a strong foundation of data management and analysis.

Wealth management firms are rich in data, but inefficient data management limits tapping its full potential. A survey by Fenergo and Wealth Briefing found that 45% of wealth managers had not made significant progress in centralizing client data for re-use throughout the organization. Robust data management solutions that break data siloes across the enterprise will be critical to achieving effective hyper-personalization.

The good news is that we see more and more solutions in the market, such as the Fenergo Client Data Master, that leverage APIs to efficiently source and manage data for a single client view to provide more seamless and personalized client lifecycle management.

As the wealth management industry confronts disruptive forces on various fronts, one factor stands out ‒ the rules of success are changing rapidly, and hyper-personalization is now table stakes to play the game.

For more insight about wealth management evolution and its impact on your business, download a free copy of the World Wealth Report 2020 developed by Capgemini, and visit Fenergo.


Elias Ghanem, Global Head of Market Intelligence, Capgemini Financial Services at Capgemini

Paul Kavanagh, Chief Revenue Officer, Fenergo