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Wealth management Webinar - How To Be More Responsive in the First 90 Days
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Transcript of Wealth management Webinar - How To Be More Responsive in the First 90 Days
Wealth Management On-boarding:
How to be More Responsive
in the First 90 DaysA Bank Systems & Technology Webcast
Sponsored by
Webcast Logistics
Featured Speakers
Doug Dannemiller
Senior Analyst
Aite Group
Luis Sierra
Industry Vice President, Banking
Progress Software
Vinaykumar S Mummigatti
VP and Global Head of BPM Practice
Virtusa
Ranks of the Wealthy Are Growing
• The number of millionaires in the world grew 17% in 2009, to 10 million
• The number of ultra-high-net-worth people (with more than $30 million to invest) also grew, by 22% in 2009
• In North America, there were around 36,300 ultra-high-net-worth people at the end of 2009, up from 30,600 in 2008, yet down from 41,200 in 2007YOUR
PHOTO HERE
What Wealthy People Want
30% of wealthy investors don’t have a financial adviser:
•49% percent say the fees charged by financial advisers are too high
•40% percent say they can get better results on their own; 37% percent say they don’t think financial advisers have their clients’ best interests at heart
Talk to me, Harry Winston!
Wealthy Investors Want Convenient Technology
Among under-50 wealthy investors:• 59% said they’d like to interact with
their financial adviser using screen sharing
• 54% would like to use webcam conferencing
• 53% would like mobile texting• 55% would like to use a tablet PC• 56% would like to use HD video from
their home or office• 52% would like video messages from
their adviser
© 2010 Aite Group, LLC www.aitegroup.com Page 7
Actionable, strategic advice on IT, business, and regulatory issues in the financial services industry
Evolution of New Customer Processes in Wealth Management
WebinarJanuary, 2011
Doug Dannemiller
© 2010 Aite Group, LLC www.aitegroup.com
Wealth Management
There is a competitive battle under way for assets and advisers.
Assets are moving at double their historical pace.
Firms with efficient processes, backed by technology are winning the battle.
Page 8
© 2010 Aite Group, LLC www.aitegroup.com 9
Wealth Management Market Sizing
• Wirehouse firms lead the US wealth management space managing 38% of assets with 12% of advisors.
• Independent RIAs have very similar characteristics to wirehouse brokers.
Source: “New Realities in Wealth Management: Has the Dust Settled?”, Aite Group, April 2010
53,600
51,240
290,700
55,186
$2,140
$1,535
$1,822
$2,271
$4,745
Online Brokerage
Independent Registered Investment Advisors
Self-Clearing Retail Brokerage
(Outside Wirehouses)
Fully Disclosed Retail Brokerage
Wirehouse
Client Assets and Number of Financial Advisors Across Wealth Management Industry Segments
(Total Client Assets = US$12.4 Trillion, as of End of 2009)
Number of Financial Advisors Client Assets (US$ Billions)
Self-Directed and Supported by Call Centers
© 2010 Aite Group, LLC www.aitegroup.com 10
New Realities in Wealth Management Eo2009
• Wire house firms are still well
behind old asset levels (minus
US$900B)
• 3% of the overall market has
shifted to other segments, with
RIAs being a major winner
• The online brokerage space is
gaining market share over
traditional brokerage firms in
response to investors’ needs
for more control and
transparency over their
investment portfolios
Source: “New Realities in Wealth Management: Ready for the Sea Change?”, Aite Group, April 2010
38%
19%
15%
12%
17%
Wirehouse
Fully Disclosed Retail Brokerage
Self-Clearing Retail Brokerage
(Outside Wirehouses)
Independent Registered Investment Advisors
Online Brokerage
Client Assets Across Wealth Management Industry Segments(Total Client Assets = US$12.4 Trillion, as of End of 2009)
Change Since End of 2008
(0.9%)
(1.8%)
0.5%
1.5%
0.8%
© 2010 Aite Group, LLC www.aitegroup.com 11
Breakaway Broker Trend Update 2010
• While the break-away broker trend seems to have slowed down at the end of 2009, the average wirehouse broker still estimates a 29% chance for breaking away within the next two years.
• This phenomenon is not isolated to wirehouses, other captive brokers also give a 23% chance of changing employer or to go independent.
36%
28%
20%
10%
4%
2%
15%
39%
25%
13%
4%
3%
Zero (Will not change employer)
1% - 24%
25% - 49%
50% - 74%
75% - 99%
100% (Will certainly change employer in next 18-24 months)
Q. What is the percentage chance for you to leave your current employer within the next 18 to 24 months?
All Other Captive Brokers (n=92)
Wirehouse Broker (n=67)
Source: Aite Group survey of 402 financial advisors, Q4 2009. Preliminary results – Publication scheduled for Q1 2010.
© 2010 Aite Group, LLC www.aitegroup.com 12
Importance of Technology For Financial Advisors
3%
11%
22%
42%
22%
Not important at all
Little importance
Neutral
Important
Very important
Q. When deciding on working for a firm, how important is the technology offered to you in your decision-making process?
(n=402) • 64% of advisors see technology as a major part when deciding on working for a firm.
• Only 14% put little or no importance on the technology of a firm.
Source: Aite Group survey of 402 financial advisors, Q4 2009. Preliminary results – Publication scheduled for Q2 2010.
© 2010 Aite Group, LLC www.aitegroup.com 13
Technology Spending Priorities
• Financial Advisors would spend 13% of their technology budget on better integrating the applications they have currently available.
• The top 5 items would receive over 50% of total technology budget.
15.8%
13.0%
9.0%
6.9%
6.8%
5.3%
4.4%
4.1%
3.9%
2.8%
2.6%
2.3%
2.3%
2.1%
Financial Planning
Increasing the Level of Integration
Customer Relationship Management
Broker Workstation
Proposal Generation
Portfolio Construction and Analytics
Portfolio Rebalancing
Portfolio Management System
Compliance Systems
Form Pre-filling
Research System For Market Data and News
Aggregated Performance and Client Reporting
Account Setup/Maintenance - Brokerage Platform
Document Management, Imaging, Workflow
Q: Please allocate your budget in percentage terms across the applications/capabilities you would like to add or improve.
(n=402)
© 2010 Aite Group, LLC www.aitegroup.com
Account Opening - Key Process
New account processing is a critical and transparent tool for demonstrating to advisers
and customers that a firm’s technology infrastructure is up to date.
Consequently, it is an area under rapid development at many firms.
Page 14
© 2010 Aite Group, LLC www.aitegroup.com
Stage One – Efficiency in a Process Silo
Source: Aite Group analysis
Account
Opportunity
Identified
Investor
Profile
Captured
Product
Level
Advice
Forms
Booklet
Generation
With
Product
Feature
Selection
E-Signature
Compliance
Review of
Proposed
Investment
Transmission
to Product
Underwriter
Transaction
Settlement
Integration of
Transaction
Details Into
Books and
Records
• The potential scope of an account opening process is broad
• There is usually a balance between solving the process comprehensively and getting approval and completing the project
• Selecting the right scope and staging process is critical for success
© 2010 Aite Group, LLC www.aitegroup.comPage 16
Stage 2 – Realizing Opportunities and Mitigating Risks in the Silo
Attrition & Cross-Selling Rates among New
Clients – Retail Bank
Source: 2008 Harland Clarke client case study.
© 2010 Aite Group, LLC www.aitegroup.com
Stage 2 - Execution: Many Firms Have Rolled-out Detailed Processes
Page 17
Stage 2 is business unit centric – cross-selling is narrowly defined as another product offered by the initiating business unit
© 2010 Aite Group, LLC www.aitegroup.com
The Next Stage
Stage 3 is an environment where the Stage 2 processes are in place – from account opening through customer on-boarding
And…
The information created or gathered in the process is captured, stored, and utilized throughout the organization
Page 18
© 2010 Aite Group, LLC www.aitegroup.com
Enabling Stage 3
Stage 3 is about creating an optimal enterprise customer relationship.
Viewing customer interactions and data as events in a complex system can enable stage 3.
In plain terms, this approach means systematically saving data that may be temporal in nature, and not necessarily viewed as “of further value” to personnel operating in a process silo.
In order to fully enable Stage 3, patterns as well as data elements need to be recognized for example:
– Multiple addresses for a single client (pattern)
– Large cash flow – passed AML screening (data)
– Very strong credit score (data)
– Direct deposit level has changed significantly (pattern)
– Source of direct deposit change (pattern)
– Beneficiaries reach age thresholds (18, 21)
Page 19
© 2010 Aite Group, LLC www.aitegroup.com
Benefits of Stage 3
Operators within a silo focus on the result they are seeking – in this case a successfully opened account.
• Landing beneficiary accounts
• Finding neighborhoods (other segments) to target market – based on successful customer relationships
• Enterprise cross-selling
• Enterprise risk mitigation
• Resource allocation at process, business unit, and enterprise level through tracking of KPI at individual, unit, and region levels.
Stage 3 allows for enterprise opportunities to be realized - across business unit, and even cross-customer.
Page 20
© 2011 Progress Software Corporation. All rights reserved.21
Poll Question
Of what stage of automation are your onboarding
processes?
• Stage 1 – Some processes automated
• Stage 2 – Most onboarding processes are automated
• Stage 3 - Intelligent onboarding operations
Wealth Management
On-boarding Transformation
Luis Sierra
Industry Vice President
Progress Software
Vinaykumar Mummigatti
VP and Global Head of BPM Practice
Virtusa
January 26, 2011
© 2011 Progress Software Corporation. All rights reserved.23
About Virtusa and Progress Software
• Established in 1996
• Headquartered in Westborough, MA
• Locations in US, Asia, Europe and
Middle East
• Technology Centers in U.S., U.K.,
India & Sri Lanka, Budapest
• 80+ active clients
• Over 5,000 world-class professionals
• Listed on NASDAQ (VRTU)
• FY 2010 Revenue Guideline: $225
million
• 32% 5-year compound annual growth
rate
Founded in 1981
Publicly traded on NASDAQ since
1991
Worldwide revenue: over
$500 million
Customers in over 140 countries
More than 2,500 partners
Used in over 140,000 organizations
© 2011 Progress Software Corporation. All rights reserved.24
Account-related
data is captured
through interview
and regulatory
forms
Information
captured on the
application is
verified
The account goes
through the
organizational
workflow for setup
and approval,
having multiple
institutional and
regulatory rules
applied
Customer can
now fund the
account to
begin the
transactions
The account is
operational
Client application
process begins
Capture
Customer Data
Identify
Verification
Account Setup
& Approval
Account
Funding
Application /
InitiationFulfillment
Core Phases of the On-boarding Process
MailDirect: Broker /
Branch / Advisor Mobile Call Center Online
© 2011 Progress Software Corporation. All rights reserved.25
Business Challenges for Wealth ManagementClient On-boarding
On-boarding The process of taking a customer from “application” to “active,”
i.e., providing a customer (retail or corporate) with access to the
product and services of a firm
Requirements vary greatly by type of financial services product
within a firm
Complex decision-making around the application process, or
Complexity around gaining access to the firm’s systems
For Financial Services firms, products typically are offered either
direct to a client (i.e. web channel) or require an intermediary
(i.e. financial advisor)
© 2011 Progress Software Corporation. All rights reserved.26
Business Challenges for Wealth ManagementClient On-boarding (cont.)
On-boarding For more complex retail products and for majority of corporate
products, there are multi step processes and approvals
frequently before you can finalize onboarding:
These typically can be very manually intensive and paper based
and lack automation and workflow control
Duplication of effort and systems across multiple product lines and
multiple channels due to lack of an enterprise-wide account
opening platform/workflow
Errors and delays in the process have high negative customer
impact
Time delays can also frustrate the Bank’s financial advisors as well
as lead to loss of fees for the bank
© 2011 Progress Software Corporation. All rights reserved.27
Client On-boarding Key Performance IndicatorsWealth Management
KPI What Is Important
Account setup to funds
available (# of days)
Show historical trends like average for all accounts, by country or
region, by agent, by customer segmentation (net worth >$30M, net
worth > $1M)
On-boarding funnel analysis Highlights on-boarding steps and possible bottlenecks firm-wide, e.g.,
Account Initiation, Verification, Compliance, Funds Transfer /
Fulfillment with $$ of Assets and # of days in each stage. Correlate
fallout rates to identify root cause.
Which brokers are driving
what business
•Assets in each step of funnel pipeline
•Conversion percentage
•Analyze by region
Cross-sell / up-sell percentage The first 90 days are the most important. Measure number of
products signed up for by client, by region, by organization.
© 2011 Progress Software Corporation. All rights reserved.28
Mail Broker/Branch/Advisor Call Center Web/Mobile
Deposit Credit Card Mortgage BrokerageCommercial
BankingTreasury &
Securities
Behind the Scenes On-boarding Processes and Systems Frequently Lack Business Agility
Challenges Impacts Results in
Inefficient and disjointed processes Onerous application process• Longer time to on-board
clients
• Loss of Revenue
• High internal cost to support
• Longer time-to-market to
add new products
• Diminished competitiveness
Siloed customer, account and
product information
•Contradictory information creates confusion
•Challenges to support multiple products
Need to support multiple channels Poor and inconsistent client experience
Multiple systems, manual & paper-
based workflows
Inability to track progress and manage the process
Increasing regulatory environment Requires flexibility in systems and processes
Line of business systems have
embedded entitlements
Entitlements are difficult to setup and support easily
and consistently across applications
© 2011 Progress Software Corporation. All rights reserved.29
Business Process
Management
(BPM)
Business Rules
Engine
(BRE)
Service-oriented
Architecture
(SOA), Enterprise
Services Bus
(ESB)
Web 2.0 and Rich
Internet
Applications
(RIAs)
Document
Management and
Imaging
Technologies
Event-driven
Architectures
Best-in-class On-boarding Solutions Require a Blend of Technologies
© 2011 Progress Software Corporation. All rights reserved.30
Delivering Operational Responsiveness
Continuous
Business Process
Improvement
Immediate Sense-
and-Respond
Real-time
Business Visibility
Further automate to capture
opportunities (cross-sell)
and minimize threats (non-
compliance, attrition)
Correlate events: e.g.,
compliance, regional
operations
Have real-time visibility of all
wealth management on-
boarding operations
© 2011 Progress Software Corporation. All rights reserved.31
Responsive Process Management Architecture
Solution Accelerators Solution Accelerators Solution Accelerators
Existing Enterprise
Systems
© 2011 Progress Software Corporation. All rights reserved.32
Responsive Process Management Architecture
Enterprise Service Bus
Semantic Data Integration
Event Capture
Transaction Flow
Discovery
Transaction Visibility Business
Event
Processing
Business
Process
Management
Business
Rules
Analytics
Existing Enterprise
Market
SurveillanceMarket
SurveillanceClient
On-Boarding
Algorithmic
TradingAlgorithmic
TradingAlgorithmic
Trading
Market
Surveillance
Smart
AirlinesSmart
AirlinesClaims
Automation
Smart
AirlinesSmart
AirlinesResponsive
Logistics
© 2011 Progress Software Corporation. All rights reserved.33
Progress and Virtusa Client On-boarding Value Proposition
Faster On-boarding –
Higher Close-Rate and Faster Time-
to-revenue
Actionable Insight –Improved
Customer Service and Cross-sell /
Up-sell
Automated Processing – for
Improved Efficiency and
Profitability
Ensure Compliance –
for Reduced Risk
© 2011 Progress Software Corporation. All rights reserved.34
On-boarding Demo
© 2011 Progress Software Corporation. All rights reserved.35
On-Boarding Demo
© 2011 Progress Software Corporation. All rights reserved.36
On-Boarding Demo
© 2011 Progress Software Corporation. All rights reserved.37
RPM Test Drive for Client On-boarding
RPM Test Drive for on-boarding
can accelerate time to market and
eliminate risks
Intensive 3-week engagement built on
Virtusa’s Understand-Evaluate-
Demonstrate (UED) framework
BPM education and RPM concepts
overview
Align Stakeholders around business
goals and KPI’s
Evaluation of on-boarding business
challenges and business case
preparation
Solution architecture/product
architecture approach for on-boarding
Solution prototype for on-boarding
Assets Offered
RPM training material
On-boarding business
case templates & ROI
calculations tool
Product evaluation
framework
Customizable On-
boarding demo
Reference architecture
for On-boarding
mapped to Progress
RPM software
© 2011 Progress Software Corporation. All rights reserved.38
RPM Test Drive for Client On-boarding (cont.)
Target audience for RPM Test Drive
Clients who have identified Customer on-
boarding as one of the key transformation areas
Business and IT stakeholders have a different
view of process and transformation goals
Largely manual processes today with little
transparency and control
Evaluating Technology options
Defining overall Program roadmap for on-
boarding
© 2011 Progress Software Corporation. All rights reserved.39
Question and Answers
Please Submit Your Questions
For more information, go to
http://www.progress.com/bankinginfo
or contact us at
or 781.280.4700
Luis Sierra
Vinaykumar Mummigatti