Asset and wealth management on the other side of COVID-19 period
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Like everything else, from retail to transport, COVID-19 is challenging financial markets. Asset and wealth managers are hit with huge disruptions. Investments, IPOs, M&As, real estate deals are practically frozen while fixed income products and stocks are unstable. According to one recent estimate, publicly traded asset managers have seen their share prices fall 20% to 30% or more since last February. The big question is: “How do you sustain business through this period and come back stronger post-COVID0-19?”
In a crisis like this, each stakeholder behaves and responds differently (but mostly in a pre-determined and agreed manner). The key is to understand how each stakeholder evolves their plan during this dynamic period of crisis.
Some factors that are being affected –and which will evolve—are discussed below. Eventually we will need to redefine and fine-tune them once the impact of COVID-19 recedes. This is essential to developing a sustainable and resilient business.
Business operation will demand an updated Business Continuity Plan (BCP). In any value chain, BCP is managed by multiple stakeholders. The way BCP has evolved during the crisis will aid in redesigning the process, translating into better client acquisition process and financial goal management. The “new” unknown unknowns must be considered during the redesign of BCP along with a slew of new regulatory requirements that will inevitable be on their way. The corollary is that existing information security policies will come under the microscope and must be aligned with the new work environment.
People management is about to take a massive turn. People are the foundation of great asset and wealth management. With social distancing and travel restrictions, employees will be away from their clients. The lack of proximity in interactions will hinder their creativity and effectiveness. In the post COVID-19 period, success will depend on how well tele/ remote/ virtual working tools are used to manage interactions, queries and solutions. A new set of best practices must ensure that customized responses are available, teams collaborate and managers monitor processes and simplify interactions.
Customer management is about to undergo a revolution. Custom views of interpersonal client interactions have been central to understanding the risk and reward profiles of clients. This profile pivots the design and execution of financial goals and portfolio creation. Advisors must manage this process in a virtual world and develop custom views that keep their customers responsive to markets and macro-economic changes. The utilization of virtual workshops, sessions, webinars, social media live casts and podcasts will grow as tools for continuous communication that also provide extra comfort to clients. One of the important aspects of such tools will be the ability to archive interactions for retrieval and analysis at any point.
Using technology to manage portfolio and trade desks will set off organizations on the hunt for robo-advisory systems, trade bot platforms, cloud and other automation tools. The tools they select will provide competitive differentiators. New technology will provide new use cases and scenarios which will fold into existing processes and deliver a stronger response to client requirements.
End-User Computing Support (EUCaaS) teams will be in demand. When we get to a virtual world, we also add volumes to interactions and transactions. A big change will be presented to EUCaaS owners. They will have to effectively utilize their existing teams and also provide a helping hand to manage increased volumes. This will be besides the burden of reorganizing existing resources and developing and utilizing bots for end-user issue management.
In the long term these changes will transform the overall value chain in asset and wealth management. When the industry is affected by the next catastrophe, it won’t panic. Instead, game changing digital process will have been baked into their systems, creating resilience and responsiveness.
Ankur KansalClient Engagement Partner for one of the world’s largest asset managers at ITC Infotech