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Wealth management Webinar - How To Be More Responsive in the First 90 Days


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Webinar hosted by Bank Systems and Technology. Speakers include AITE Group, Progress Software and Virtusa

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Wealth management Webinar - How To Be More Responsive in the First 90 Days

  1. 1. Wealth Management On-boarding: How to be More Responsive in the First 90 Days A Bank Systems & Technology Webcast Sponsored by
  2. 2. Webcast Logistics
  3. 3. 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
  4. 4. 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 downYOUR from 41,200 in 2007PHOTO HERE
  5. 5. What Wealthy People Want30% of wealthy investors don’t havea financial adviser:•49% percent say the fees charged by Talk to me,financial advisers are too high Harry Winston!•40% percent say they can get betterresults on their own; 37% percent saythey don’t think financial advisershave their clients’ best interests atheart
  6. 6. 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
  7. 7. Actionable, strategic advice on IT, business, and regulatory issues in the financial services industryEvolution of New Customer Processes inWealth ManagementWebinarJanuary, 2011 © 2010 Aite Group, LLC Page 7 Doug Dannemiller
  8. 8. Wealth ManagementThere is a competitive battle under wayfor assets and advisers.Assets are moving at double theirhistorical pace.Firms with efficient processes, backed bytechnology are winning the battle. © 2010 Aite Group, LLC Page 8
  9. 9. Wealth Management Market Sizing Client Assets and Number of Financial Advisors Across Wealth Management Industry Segments • Wirehouse firms (Total Client Assets = US$12.4 Trillion, as of End of 2009) lead the US wealth $4,745 management space Wirehouse 55,186 managing 38% of Fully Disclosed $2,271 assets with 12% of Retail Brokerage 290,700 advisors. Self-Clearing $1,822 • Independent RIAs Retail Brokerage (Outside Wirehouses) 51,240 have very similarIndependent Registered $1,535 characteristics to Investment Advisors 53,600 wirehouse brokers. $2,140 Online Brokerage Self-Directed and Supported by Call Centers Number of Financial Advisors Client Assets (US$ Billions) Source: “New Realities in Wealth Management: Has the Dust Settled?”, Aite Group, April 2010 © 2010 Aite Group, LLC 9
  10. 10. New Realities in Wealth Management Eo2009 Client Assets Across Wealth Management Industry Segments (Total Client Assets = US$12.4 Trillion, as of End of 2009) Change Since End of 2008 • Wire house firms are still well Wirehouse 38% (0.9%) behind old asset levels (minus US$900B) Fully Disclosed 19% (1.8%) Retail Brokerage • 3% of the overall market has Self-Clearing shifted to other segments, with Retail Brokerage 15% 0.5% RIAs being a major winner (Outside Wirehouses)Independent Registered • The online brokerage space is 12% 1.5% gaining market share over Investment Advisors traditional brokerage firms in Online Brokerage 17% response to investors’ needs 0.8% for more control and transparency over their investment portfolios Source: “New Realities in Wealth Management: Ready for the Sea Change?”, Aite Group, April 2010 © 2010 Aite Group, LLC 10
  11. 11. Breakaway Broker Trend Update 2010 • While the break-away Q. What is the percentage chance for you to leave your current broker trend seems to employer within the next 18 to 24 months? have slowed down at 36% the end of 2009, the Zero (Will not change employer) 15% average wirehouse 1% - 24% 28% broker still estimates a 39% 29% chance for 25% - 49% 20% breaking away within 25% the next two years. 10% 50% - 74% 13% • This phenomenon is 4% All Other Captive not isolated to 75% - 99% 4% Brokers (n=92) wirehouses, other100% (Will certainly change employer 2% Wirehouse Broker captive brokers also (n=67) in next 18-24 months) 3% give a 23% chance of changing employer or to go independent. Source: Aite Group survey of 402 financial advisors, Q4 2009. Preliminary results – Publication scheduled for Q1 2010. © 2010 Aite Group, LLC 11
  12. 12. Importance of Technology For Financial Advisors 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 Very important 22% deciding on working for a firm. Important 42% • Only 14% put little or no importance on Neutral 22% the technology of a firm. Little importance 11% Not important at all 3%Source: Aite Group survey of 402 financial advisors, Q4 2009. Preliminary results – Publication scheduled for Q2 2010. © 2010 Aite Group, LLC 12
  13. 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. Q: Please allocate your budget in percentage terms across the applications/capabilities you would like to add or improve. (n=402) Financial Planning 15.8% Increasing the Level of Integration 13.0% Customer Relationship Management 9.0% Broker Workstation 6.9% Proposal Generation 6.8% Portfolio Construction and Analytics 5.3% Portfolio Rebalancing 4.4% Portfolio Management System 4.1% Compliance Systems 3.9% Form Pre-filling 2.8% Research System For Market Data and News 2.6% Aggregated Performance and Client Reporting 2.3% Account Setup/Maintenance - Brokerage Platform 2.3% Document Management, Imaging, Workflow 2.1% © 2010 Aite Group, LLC 13
  14. 14. Account Opening - Key Process New account processing is a critical andtransparent 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. © 2010 Aite Group, LLC Page 14
  15. 15. Stage One – Efficiency in a Process Silo Forms Booklet Account Investor Product Generation Opportunity Profile Level With E-Signature Identified Captured Advice Product Feature Selection• The potential scope of an account opening process is broad• There is usually a balance between Integration of solving the process comprehensively Compliance Review of Transmission Transaction Transaction and getting approval and completing the to Product Details Into Proposed Settlement Underwriter Books and Investment project Records• Selecting the right scope and staging process is critical for success Source: Aite Group analysis © 2010 Aite Group, LLC
  16. 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. Page 16 © 2010 Aite Group, LLC
  17. 17. Stage 2 - Execution: Many Firms Have Rolled-out Detailed Processes Stage 2 is business unit centric – cross-selling is narrowly defined as another product offered by the initiating business unit © 2010 Aite Group, LLC Page 17
  18. 18. The Next StageStage 3 is an environment where the Stage 2processes are in place – from account openingthrough customer on-boardingAnd…The information created or gathered in theprocess is captured, stored, and utilizedthroughout the organization © 2010 Aite Group, LLC Page 18
  19. 19. Enabling Stage 3Stage 3 is about creating an optimal enterprise customer relationship.Viewing customer interactions and data as events in a complex systemcan enable stage 3.In plain terms, this approach means systematically saving data that maybe temporal in nature, and not necessarily viewed as “of further value” topersonnel operating in a process silo.In order to fully enable Stage 3, patterns as well as data elements needto 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) © 2010 Aite Group, LLC Page 19
  20. 20. Benefits of Stage 3Operators within a silo focus on the result they are seeking – in this casea 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 - acrossbusiness unit, and even cross-customer. © 2010 Aite Group, LLC Page 20
  21. 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 operations21 © 2011 Progress Software Corporation. All rights reserved.
  22. 22. Wealth ManagementOn-boarding TransformationLuis SierraIndustry Vice PresidentProgress SoftwareVinaykumar MummigattiVP and Global Head of BPM PracticeVirtusaJanuary 26, 2011
  23. 23. About Virtusa and Progress Software • Established in 1996  Founded in 1981 • Headquartered in Westborough, MA  Publicly traded on NASDAQ since • Locations in US, Asia, Europe and 1991 Middle East  Worldwide revenue: over • Technology Centers in U.S., U.K., $500 million India & Sri Lanka, Budapest  Customers in over 140 countries • 80+ active clients  More than 2,500 partners • Over 5,000 world-class professionals  Used in over 140,000 organizations • Listed on NASDAQ (VRTU) • FY 2010 Revenue Guideline: $225 million • 32% 5-year compound annual growth rate23 © 2011 Progress Software Corporation. All rights reserved.
  24. 24. Core Phases of the On-boarding Process Direct: Broker / Mail Branch / Advisor Mobile Call Center Online Application / Capture Identify Account Setup Account Fulfillment Initiation Customer Data Verification & Approval FundingClient application Account-related Information The account goes Customer can The account isprocess begins data is captured captured on the through the now fund the operational through interview application is organizational account to and regulatory verified workflow for setup begin the forms and approval, transactions having multiple institutional and regulatory rules applied 24 © 2011 Progress Software Corporation. All rights reserved.
  25. 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)25 © 2011 Progress Software Corporation. All rights reserved.
  26. 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 bank26 © 2011 Progress Software Corporation. All rights reserved.
  27. 27. Client On-boarding Key Performance IndicatorsWealth Management KPI What Is Important Account setup to funds Show historical trends like average for all accounts, by country or available (# of days) 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 •Assets in each step of funnel pipeline what business •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.27 © 2011 Progress Software Corporation. All rights reserved.
  28. 28. Behind the Scenes On-boarding Processes and Systems Frequently Lack Business Agility Mail Broker/Branch/Advisor Call Center Web/Mobile Commercial Treasury & Deposit Credit Card Mortgage Brokerage Banking SecuritiesChallenges Impacts Results inInefficient and disjointed processes Onerous application process • Longer time to on-boardSiloed customer, account and •Contradictory information creates confusion clientsproduct information •Challenges to support multiple products • Loss of RevenueNeed to support multiple channels Poor and inconsistent client experience • High internal cost to supportMultiple systems, manual & paper- Inability to track progress and manage the process • Longer time-to-market tobased workflows add new productsIncreasing regulatory environment Requires flexibility in systems and processes • Diminished competitivenessLine of business systems have Entitlements are difficult to setup and support easilyembedded entitlements and consistently across applications 28 © 2011 Progress Software Corporation. All rights reserved.
  29. 29. Best-in-class On-boarding SolutionsRequire a Blend of Technologies Service-oriented Business Process Business Rules Architecture Management Engine (SOA), Enterprise (BPM) (BRE) Services Bus (ESB) Web 2.0 and Rich Document Internet Management and Event-driven Applications Imaging Architectures (RIAs) Technologies29 © 2011 Progress Software Corporation. All rights reserved.
  30. 30. Delivering Operational Responsiveness Further automate to capture Have real-time visibility of all Correlate events: e.g., opportunities (cross-sell) wealth management on- compliance, regional and minimize threats (non- boarding operations operations compliance, attrition) Continuous Real-time Immediate Sense- Business Process Business Visibility and-Respond Improvement30 © 2011 Progress Software Corporation. All rights reserved.
  31. 31. Responsive Process Management Architecture Solution Accelerators Solution Accelerators Solution Accelerators Existing Enterprise Systems31 © 2011 Progress Software Corporation. All rights reserved.
  32. 32. Responsive Process Management Architecture Market Algorithmic Smart Smart Market Surveillance Algorithmic Trading Smart Airlines Smart Airlines Client Surveillance Algorithmic Trading Market Claims Airlines Responsive Airlines On-Boarding Trading Surveillance Automation Logistics Transaction Visibility Business Business Business Process Event Transaction Flow Rules Management Processing Discovery Event Capture Analytics Enterprise Service Bus Semantic Data Integration Existing Enterprise32 © 2011 Progress Software Corporation. All rights reserved.
  33. 33. Progress and VirtusaClient On-boarding Value Proposition Actionable Faster Insight – On-boarding – Improved Higher Close-Rate Customer Service and Faster Time- and Cross-sell / to-revenue Up-sell Automated Processing – for Ensure Improved Compliance – Efficiency and for Reduced Risk Profitability33 © 2011 Progress Software Corporation. All rights reserved.
  34. 34. On-boarding Demo34 © 2011 Progress Software Corporation. All rights reserved.
  35. 35. On-Boarding Demo35 © 2011 Progress Software Corporation. All rights reserved.
  36. 36. On-Boarding Demo36 © 2011 Progress Software Corporation. All rights reserved.
  37. 37. RPM Test Drive for Client On-boarding RPM Test Drive for on-boarding can accelerate time to market and Assets Offered eliminate risks  RPM training material  Intensive 3-week engagement built on  On-boarding business Virtusa’s Understand-Evaluate- case templates & ROI Demonstrate (UED) framework calculations tool  Product evaluation  BPM education and RPM concepts framework overview  Customizable On-  Align Stakeholders around business boarding demo goals and KPI’s  Reference architecture  Evaluation of on-boarding business for On-boarding challenges and business case mapped to Progress preparation RPM software  Solution architecture/product architecture approach for on-boarding  Solution prototype for on-boarding37 © 2011 Progress Software Corporation. All rights reserved.
  38. 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- boarding38 © 2011 Progress Software Corporation. All rights reserved.
  39. 39. Question and Answers Please Submit Your Questions For more information, go to or contact us at or 781.280.4700 Luis Sierra Vinaykumar Mummigatti vmummigatti@virtusa.com39 © 2011 Progress Software Corporation. All rights reserved.