Digital Strategy – Modern Chess for Financial Services Firms

By Pete McAteer and Jeff Wilk

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Digital technology use has accelerated in the last 12 months in many areas, from education to exercise to the financial services industry. So what is digital transformation, and what does it mean for the financial services industry? Who will benefit and how? Join our panelists Dave Altschul, Jeff Wilks, Jim Roth and Pete McAteer as they discuss these topics and more.


Transcript provided by Temi transcript services

Jim Roth:  Hi, I’m Jim Roth from Oyster Consulting.  Thank you for joining us for today’s podcast on digital strategies. The global pandemic provided a rare window into the future of business as it unfolded in real time. And talking with some of our customers it’s clear from their sentiments, that it’s only the beginning.  Innovations in artificial intelligence, 5G, nanotechnology, and biotech have all kick-started what some are referring to as the fourth industrial revolution.  Clearly, we appear to be in the midst of a reset, one that’s already transforming the economy. And what should advisors and investors expect? Remote working has fundamentally changed how many of us experienced our jobs and even the kind of work we do. It’s becoming clear that millions of workers are reevaluating priorities, such as how much time do they actually want to spend in the office, where do they want to live? and what companies are attractive beyond paychecks.  Surveys also continue to suggest that unusually high percentage of global workers are considering alternatives and those figures are even higher for women. So why digital now?  We noticed digital usage accelerating during a 12-month period when in the past any transformation could take up to five years. Everything that could be digitized was from education to exercise, to currency, to automobiles.  Nearly every business transformed into a tech business.

I remember when Bill Gates was leading Microsoft, he shared that the first rule of any technology used in business is that automation applied to an efficient operation, will magnify the efficiency. And then, of course, automation applied to an inefficient operation will magnify the inefficiencies. So with me today are three leaders representing Oyster with deep knowledge of digital transformation. My partners, Dave Altschul, Pete McAteer, and Jeff Wilk would join in this discussion. So, Dave, let me turn to you first.  Dive into the question of what digital transformation really means.

Dave Altschul:  Oh, hi, Jim.  Thank you very much for that introduction and great question. What is digital transformation? So let’s just define that at its basic level.  It’s really the adoption of digital technology to transform service or business. How do you achieve that? It’s by replacing non-digital or manual processes with a digital process. And it’s also replacing old technology with new technology.  That still is a part of the overall current day digital transformation. So now that we defined it to a certain point, let’s break it down a little bit more.

So finding the right technology isn’t necessarily easy to for a business.  Businesses are confronted with what I call the jigsaw puzzle dilemma. And just because the technology is considered to be best in class, doesn’t equal that it’s best for your business.  Common past technology integrations, what is called a point solution. So these are kind of like the one-off digital or technology solutions that firms have implemented, not necessarily looking at the overall impact on the firm’s business and how that all fits in together.

And we saw a lot of that in the last year with the pandemic. So we are at a point now where firms are looking to really fine tune the technologies that they have in place after they’ve seen the adoption of technology and technology in general, in a greater mass over the past year. Again, an example is that your business needs a specific technology. You implement that specific technology without the overall consideration of the technology in house. Again, that’s at a very basic level, so what should be considered? 

Each financial technology service and/or platform partners need to play nice in the sandbox. And that goes back again to the best in class. You might be utilizing the best in class, but if the platforms don’t work well to each other, you’re paying for bifurcated processes, efficiencies.  These are things that would increase your NIGO rates.

Again, having a tighter cohesive suite of technology that works well together, that’ll create a better overall experience for the client, and reducing errors, reducing the idea of having a swivel chair going from one technology to another.  Again, it creates a very efficient workflow from A to Z. Now let’s move a little bit into the idea of artificial intelligence.  With all the latest technology today, you’re collecting a ton of data and this data can really help your business out in many different ways. You can use the data to more accurately prospect, to understand where your firm or for an advisor, you can find areas to improve upon. It’s a better understanding also on how to interact with your clients.  With that being said, without going too much further into the definition of what digital transformation is, I hope these few points really show the benefits of what this can bring to the table.  With that, Jim, I’m going to pass the baton back to you.

Jim Roth:  Hey Dave, great description. Thank you. You know, it’s easy to see how broad this topic can be, but what about the drivers of the change.  Jeff Wilk, so why did digital transformation become so critical and so topical.

Jeff Wilk:  Thanks, Jim.  I think there are three or four major drivers of digital transformation that have really taken hold over the past 12 months.  Obviously, first and foremost, is the results of the pandemic. Remote work access became an absolute necessity almost overnight. This forced breakthroughs within firms and also with clients in terms of policies, risk profiles, personal concerns with using technology, or work from home situations. And all of that had to change overnight. Bottom line is that connectivity had to be maintained. And at this point, there’s really no going back. Technology is here. Digital strategy is critical to make sure all of these are addressed in unison. Demographics also changed, but not in the traditional sense.  The demographics of investors didn’t change because of digital transformation, or the advisor demographics didn’t change. But what changed was the broadening of who was adopting technology and, in short, it was everybody.  But the pandemic, again, everybody was, in essence, locked out of face-to-face personal transactions and everything had to go online.

So that demographic model had to shift as well. And firms and advisors, everyone had to react again, overnight, to how do we interact with clients at all ends of the demographic spectrum? Very, very, very key.  And in the same vein, geography changed. Now that one may seem a little bit odd, but there was a move. There still is a move. You look at what’s going on with housing, the housing market all over the country.  People who started to work from home who were working remote, companies who are enabling associates to work from home and work remote, many started raising their hands and saying, I’m moving, or I want to move. I don’t need to be tied to a 15, 21-hour commute to the office. I can move to the middle of the country, to the coast, whatever.  As a result of that, people started to move everywhere.

But now from a client perspective, they expect the same level of quality and a level of service that they were getting in-person. So yet again, another driver that is here to stay for digital. And then of course, there’s the traditional drivers, operational efficiency, risk mitigation, many of the same benefits that have been there for a very, very long time, but now they’ve become amplified. Everybody’s still needs to drive for a lower note, NIGOs, better data retention, but the need for paperless for e-sign for things like are much more critical than ever before. As Dave mentioned that tech stack is more critical than ever. It’s not just about the individual applications that a firm or advisor is using in some surveys that shows to be between eight and 10 different applications in total, but they also have low adoption and they’re not being utilized across the board in a unified way. Instead, they’re this hopscotch approach where, I think Dave, you called it a swivel chair approach that full digital strategy is needed at this point to make sure that many of these, what you can call aspirational or tactical technology investments over the past year, have a full training component behind them, an adoption plan in place to make that investment worthwhile for the long-term.  

Jim Roth:  Jeff thanks.  You know, there are many market forces driving a need for a digital strategy. So Pete McAteer, what have Oyster consultants seen in the marketplace and how would Oyster engage with firms, thinking about a new digital strategy?

Pete McAteer:  Thanks, Jim, and thanks, Dave, and thanks Jeff, for great information. That’s a lot to think about and a lot to unpack.  At Oyster, and the way we approach our clients, we first seek to understand the firm – who they are, what their goals are, what their strategies are, what’s worked well, what hasn’t worked well.   We like to say, we want to do a current state assessment where we evaluate, assess, document what we hear, what we see, what we review in the documentation.  What we hear in the interviews as we’re talking to key stakeholders, and the leaders across the firm, making sure there’s a common understanding of what ‘it’ is, what digital is and, in this case, what digital strategies are.  What it means to the firm, what those interpretations, what those visceral reactions may be to hearing about a digital strategy.  What does it mean? What does it mean to the firm? What does it mean to their advisors and what does it mean to the end investor?

So as we go about doing this, how Oyster approaches our clients is, we first request as much documentation as we can get. We ensure that we’re talking to all the key stakeholders, including advisors, to understand where they stand, what’s important to them, what their fears are, what the opportunities are and, really, what keeps them awake at night relative to digital. And what does digital mean to them? So what we end up doing is documenting that current state, holding that mirror up to the firm, making sure we understand the firm, document what we’ve heard relative to the goals, the objectives, the end state, where they want to be in three to five years.  And then work with a firm to define a specific action plan to get there and to execute on that strategy.  Ensuring that it’s going to meet those objectives and building metrics and milestones around that strategy to ensure they end in a comprehensive manner that will yield the most successful optimum outcomes for the firm.

There is no cookie cutter approach. We don’t ever approach it that way. I think that the bottom line is, we need to ensure that the customized approach meets their needs, exceeds their expectations, and has a better chance for success.

Jim Roth:  Thanks, Pete. Yeah, ideas are great, but without a well thought out process, the desired results may not be achieved. So speaking of desired results, let’s take the last few minutes to quickly discuss the beneficiaries of a digital strategy. So a question for each of you, Dave, then Jeff, then Pete, who do you see as the key group that could benefit from a digital transformation?

Dave Altschul:  Jim, thank you. Let me take the first item over here. And let’s take a look at the benefits for the client. It’s really providing new avenues to interact with their advisor, utilizing social media. You can have virtual meetings like zoom.  You know, things like this have not really been heavily utilized pre pandemic, but almost everybody is used to these video conferences, new ways of interacting with people. So it just opens up another avenue. It’s not meant to replace face-to-face meetings or telephone calls or emails, as well. The technology also gives the client the ability to have a clear holistic view of their assets. Another thing that comes out with this digital technology, that’s come out in the last few years, is that it’s adding more options from an asset management perspective, such as digital advice. And, that’s really starting to take hold these days. So let’s go back to the AI and how that is helping to individualize digital communications. Let me pass the Baton over to Jeff and maybe Jeff can tell us a little bit further about some of the other recipients of the benefits of the technology.

Jeff Wilk:  Absolutely. Dave, thank you. Advisors – Clearly, from an advisor perspective, as we’ve mentioned and touched on quite a bit, online, remote and virtual, all of the above, it’s here to stay, not replacing face-to-face, but clearly all of those other means are here to stay.  At the same time, an interesting kind of phenomenon has taken place over the past year.  I mean society as a whole, hasn’t stood still there. There’s been a whole lot of improvements in general, rapid improvements, in various forms of online communications, media entertainment. And as a result, all of our expectations have risen in terms of the ability to access, the quality of communications, all of these things that we’re being exposed to.  We’re starting to take them for granted because we’re simply getting used to them. Well, this can provide a benefit, but at the same time, a challenge for advisors who need to basically keep up with that pace of improvement. 

They need to be able to differentiate.  They need to be able to differentiate their services, even differentiate perhaps based on the quality of the communications. And the way they’re doing online is a zoom call with a faded background. Sufficient, do they need to be in a different stage location, things such as that, or are they using the right equipment? Is the volume, is the voice quality coming through? All of these things are getting upped, if you will, across society in general. And that needs to happen from an advisor standpoint too. They need to be able to also leverage the technology. I think they have the way, you said, to provide that holistic experience. And at the same time differentiating their levels of advice, whether it be service oriented planning, coaching, to deliver it on an as needed basis to a wide range of their client demands in a very collaborative way. So I advisors are a second huge beneficiary.

Pete McAteer:  From the firm’s perspective, from the decision-makers perspectives, the executive team needs to be on the same page on how they’re going to address very common problems. We see common challenges, I think is a better way to describe it, across the firms. And it’s usually around things like the low balanced accounts, which are typically your millennials, are your new investors, that are looking for digital. They’re looking for a more mobile accessible solution to help them with their needs. From the firm’s perspective, they’re looking for efficiencies. They’re looking for operational efficiencies as well as the human interaction. So that model of the digital discount brokerage, which we talked about in the past, and everybody’s got their own definitions of what that means to a firm.  But there’s economic efficiencies, there’s operational efficiencies and above all, I think there’s regulatory and compliance efficiencies that providing a platform for the firm to be able to comprehensively manage, assess, view, and supervise the activities that are going on in this platform.

That’s invaluable to the firm in this day and age, from the decision-makers perspective, there are rules of engagement concerns from their advisors. The advisors in some ways can be intimidated or concerned by the introduction of a mobile solution or a digital solution. But we see that where their strategies and rules of engagement, and we institutionalize this approach to dealing with the new investor, the millennial, the lower balance accounts, that there is a way for the firm to manage those much more efficiently and effectively as well as grow organically, grow the future wealth client.

Jim Roth:  So this concludes today’s podcast on digital strategies, and we’d like to thank Dave Altschul, Pete McAteer, and Jeff Wilk, and we truly hope it was a productive use of your time. If you’d like additional information, please call us at Oyster Consulting at 804-965-5400 or visit our website at

About The Podcast Speakers
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Pete McAteer

Pete McAteer has senior level management experience in coaching, consulting and leading large programs and operations teams, which drive significant, impactful change management, process improvement and implementation efforts. He possesses a deep background with over 30 years of experience with Fortune 500 companies working in International Quality Manufacturing and Financial Services industries.

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