Adviser Innovation, Australia: Cognizant’s Banking and Financial Services Leaders in Australia Say Predictive Analytics Enhances Customer Engagement in Wealth Management

Carlo Lacota and Dushyant Kapoor

“On the one hand, Australian wealth managers are experiencing significant cost pressures due to legislative changes, while on the other hand, customer expectations regarding digital experience and personalization are increasing,” write Cognizant’s Carlo Lacota, Assistant Vice President, Banking and Financial Services, and Dushyant Kapoor, Director, Banking and Financial Services Consulting. “The emergence of robo-advisors is driving innovation in digital experience and data analytics.” Excerpts:

“Predictive analytics and its sibling artificial intelligence (AI) are the hottest topics around. We truly are in the age of Big Data — this is not just because of the volume of data collected and available, but also because customers’ understanding of the stored data about them and how it could be used has also matured. Technical advances have made data collection, storage and sharing cheaper and less cumbersome, thereby promoting the use of analytics by wealth managers.

The availability of a vast amount of product, market and customer behavior data is helping customers make investment decisions based on date/analysis of the past trends, peer group portfolio decisions, etc. Used in conjunction with face-to-face advice by financial advisors, data-driven algorithmic advice can potentially drive better investment decisions by customers.

Another area currently being explored is to integrate external data sources with internal data to derive deeper insights about customers. Merging social media data may be exciting, but you are likely to get more insights by merging customer contact data with transaction data that resides within internal “silos”. In addition, external data sources make you think about the balance between “useful and creepy”.

It is important to be open and honest about the usage of data sources. Being open about what data is being used and how that can help your customers is critical. Before jumping on the bandwagon, wealth managers need to consider a number of common do’s and don’ts while rolling-out their respective analytics strategies.

Don’t equate complexity with success, underestimate the importance of change management, and let the available data or a particular methodology drive the process. Look for solutions rather than problems. Understand what success means for the end users. Think about the security of customer data and associated analysis as one breach can take away customers’ trust gained over a number of years.

Wealth managers need to offer simplified yet intuitive front-end experience to their customers whilst ‘masking’ the underlying complexity of process and IT landscape. To achieve this, wealth managers need to work closely with their internal and external IT partners to optimize their IT and process landscape through simplification and by leveraging emerging technologies.”

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