Blending human interaction and digitalisation is critical to delivering operational excellence

First and foremost, digitalisation strategies must have substance over style, placing stakeholders’ needs and requirements at the forefront of planning, design, build, test and implementation, with subsequent upgrades. Lombard International Group’s research has shown that wealth professionals have expressed modest satisfaction with the current digital offering from wealth assurance providers (scoring 2.89 out of a 5, with 5 being “very satisfied”)³ Is this frustration due to the limited availability of digital services or to the fact that these solutions do not meet their needs?

When executed well, digitalisation undoubtedly enables companies to grow profitably and sustainably. Research by Accenture found that financial advisors who effectively incorporated digital tools into their practices saw a 74% increase in Assets Under Management (AUM) and a considerable 77% increase in client retention⁴.

At Lombard International Group, we have digitally matured and learnt from our experiences, having successfully launched our digital servicing platform ‘Connect’ back in 2017. In June 2019, France was selected as a pilot country to launch new functionality enabling a full digital onboarding process. Overall 64% of new policies throughout 2020 were onboarded online by our French partners; be they private bankers, independent wealth and financial advisers, insurance brokers or family officers. Our experience clearly shows how the pandemic impacted the way in which advisers conducted business and accelerated the move to digital. In January 2020, 36% of new policies issued in France were inputted online, which rose significantly to a peak of 86% during last year. Interestingly, the Pericles survey found that 81% of life insurers in Luxembourg are developing their own unique digital offerings, in contrast to outsourcing through pre-existing third-parties⁵; demonstrating the shift towards more personalised and tailored solutions that can be customised to the needs of each client.

Overall, digital technology should not be viewed as a silver bullet, but as a complementary and value accretive tool in delivering an engaging client experience, whilst at the same time improving operational efficiency. This nexus is the very essence of digital transformation, or perhaps should we say digital integration. This is because digitalisation cannot work alone in isolation without the talent and expertise of people-to-people interaction. In our recent Wealth Assurance survey, when asked about the most important criteria when it comes to choosing a preferred provider, wealth management professionals affirmed that “quality of service” was by far the most important, with “good relationships and communications”, followed by “technical expertise and knowledge” being ranked second and third respectively. Interestingly, digitalisation ranked fourth⁶. Whilst the vast majority of wealth management professionals have high expectations on digital, this only becomes relevant when their primary needs are fulfilled, i.e. human interaction, expertise and a relevant value proposition.

I firmly believe that building strong personal relationships be they face to face, over the telephone or via Zoom, are at the heart of the wealth management industry. Digital solutions need to morph and evolve taking into account existing client-centric servicing architecture. Only then will digitalisation truly complement and enhance technical expertise, advice, client experience, and ultimately help simplify complexity.

Considering individual needs, cultural nuances and having a thorough understanding of local regulations ensures relationships are built for the long-term with both clients and intermediaries. Finding the right balance and blend between human expertise and technology is the key to success and remains central to delivering operational excellence, whilst ensuring we are able to meet the wealth, estate and succession planning needs of our high and ultra-high net worth clients.

^1.The European Wealth Assurance Report, Lombard International, 2021, www.wealthassurancereport.com

^2.Stratégies digitales et Wealth Insurance au Luxembourg, Pericles, 2021

^3.European Wealth Assurance Report, Lombard International, 2021, www.wealthassurancereport.com

^4.Digital Wealth Management: Reimagining Wealth Management for the Digital Age: Empowerment, Engagement, Agility, Accenture, 2014

^5.Stratégies digitales et Wealth Insurance au Luxembourg, Pericles, 2021

^6.The European Wealth Assurance Report, Lombard International, 2021, www.wealthassurancereport.com