Global fintech Personetics’ President of Americas Jody Bhagat says “basic personalized insights will be table stakes for financial institutions by end of 2023”
Personalized insights and advice will transform wealth management and provide enormous value to customers, if the industry embraces a more personalized approach. Personalized advice is a key step on the journey to autonomous finance, which involves four stages: data enrichment; personalized insights and advice; unified advice across channels; and finally, autonomous finance. This was the message shared by Jody Bhagat, President of Americas at Personetics, when he addressed this month’s SEC meeting of the Asset Management Advisory Committee (AMAC).
“Implemented successfully, data-driven personalization creates a virtuous customer flywheel where increased customer engagement and satisfaction leads to deeper relationships and a stronger customer franchise.”
Customers juggling many financial ‘jobs to be done’
Whether maximizing retirement savings, saving for a goal, paying down debt, or growing investments, consumers juggle a multitude of jobs to be done. Regional banks, fintechs, Big Tech and Wealth Management providers are all in competition to help users lighten the load, but the burden of decision-making and taking action remains with the customer.
Following his update to the committee, Bhagat said: “Most people struggle to find time to stay on top of basic personal finance management – let alone optimize their financial wellbeing. Advancements in data and analytics allow wealth management firms to efficiently deliver personalized advice to all customers, not just their most profitable ones.”
Autonomous finance offers a personalized solution
Autonomous finance – defined by Forrester as ‘algorithm-driven services that make financial decisions and take action on a customer’s behalf’ – is emerging as an opportunity to delight customers. By analyzing customers’ transaction data, financial institutions can provide personalized insights and advice in real time and automate tasks to help customers reach their goals faster with less manual input.
Autonomous finance can meet the needs of mass market customers by helping them to manage debt and build savings; it can offer mass-affluent customers assistance with saving for a goal or maximizing retirement contributions; and for affluent customers, it can share automated insights with wealth advisors and minimize cash in low-interest accounts.
Bhagat added: “Customers’ expectations are changing, and they are demanding more personalized advice across their financial holdings. Financial institutions now have access to technology which can deliver data-driven insights at scale and help customers with their overall financial wellbeing. While many financial institutions are currently in early stages of this journey, a basic level of personalized insights and advice will be table stakes by the end of 2023.”
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The evolution of the relationship manager or advisor
Bhagat is confident that financial advisors and relationship managers will remain essential to serving wealth customers’ comprehensive needs despite the pace of innovation in AI. He suggests the concept of ‘connected channels’, or delivering unified advice across channels, is a key enabler of successfully addressing the needs of different segments.
Bhagat says: “Wealth customers rely on relationship managers or advisors to know their financial situation and how to solve for their goals. Data-driven insights can be curated for relationship managers to make their customer interactions more informed and valued by customers. In an environment where financial institutions are increasingly leveraging data, consumer privacy and data protection processes, compliance controls are critical to delivering an effective and compliant experience.
“Implemented successfully, data-driven personalization creates a virtuous customer flywheel where increased customer engagement and satisfaction leads to deeper relationships and a stronger customer franchise.”
Personetics is the leading provider of data-driven personalization and advice for financial institutions in North America, now serving ten of the region’s top 25 banks.
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