The pace of change in client communications by investment managers far outpaces many other operational elements of the business. There are a number of driving forces, chief among them has been interest by investment managers to provide their clients with customized and tailored content and increasingly to provide clients with a digital experience. To date, firms have largely supported such customization through manual processes and one-off solutions.
At SS&C, we’ve been addressing the evolving client communications requirements of investment managers for over 20 years and we see first-hand the quickening pace of change. In order to ensure that our solutions remain relevant to our clients today and continue to grow to meet evolving future needs, we employ a disciplined product management approach. This approach leverages significant client feedback and closely monitors broader macro-level emerging trends. The following outlines some immediate and long term market trends we see developing in the client communications segment of investment management operations:
- Process improvement and efficiency gains - According to research from CEB Tower Group, 60% of investment managers globally use client communications solutions installed prior to 2007. Technology changes since then drive not only more efficient reports processing but also more effective, robust solutions for creating custom, omnichannel report output.
- Increasing need by clients for a digital experience - According to a study entitled “Wealth & Asset Management Trends” conducted by Ernst & Young; 59% of those surveyed claimed their primary channel for receiving investment advice would be through digital experiences within the next 2 years. This compares to 26% face-to-face and the remainder in print form. The move to digital communications is not in question.
- Migration of process ownership from IT to business - IT organizations can be overwhelmed by configuration and change requests for report templates, client-specific content and more. Investment management firms want and need their IT resources to focus on high-priority items that only they can service – supporting systems with mission-critical endeavors like ensuring the firm can trade, account for gains and losses and measure performance. Adjusting client reporting templates to update a disclaimer often fall behind in the queue. It’s important to have the resource in place to properly address issues.
- More client-driven customizations - Client communications have come to be an opportunity for differentiation from the competition. Providing more client-specific context on exposures to market segments, geographies, performance attribution and other key information can be a significant differentiator where performance differentiation is not nearly as simple to achieve.
- Metrics on client consumption/engagement - With traditional printed (hard or soft copy) client communications, there is not much insight or visibility into how engaged your clients are and to what extent they look at any specific aspect of the reports. Client portals can be designed to allow your clients to determine what specific information they want to see. This digital experience also allows investment managers to gain insight into how often and to what extent clients are engaging and what specific content is most interesting to them.
- Greater demand for contextual reporting - Similar to the previous point, providing clients with an almost overwhelming amount of data in both tabular and graphical forms is a well-trodden path. Summarizing, comparing and contrasting those data points is what is emerging as increasingly important to clients. Automated solutions that can interpret and describe vast amounts of data will become more in demand as investment managers look to give their clients the information they want and to allow managers to further differentiate themselves from their competition.
Written by Mike Kendall
Director of Global Product Strategy, SS&C Institutional & Investment Management