At my local bank branch (which won’t be named) I noticed a technician working on pneumatic tube transport (PTT). It struck me that this bank was actually spending money to maintain technology that was pioneered in the 1850s. It’s an expensive anachronism built specifically for moving hard copies of documents and currency around in the analog era. This is the digital age — if you are still spending on money on such outdated technology, your business is probably going down the tubes, not up.

PTT’s aren’t even among the most glaring examples of technology financial firms often cling to for a variety of reasons. We’re still stunned to find advisory firms, banks and insurance brokerages still using fax machines or middle and back office teams tortured with Excel spreadsheets rather than an integrated SaaS solution.

Less egregious, but no less a challenge, are the technologies that change so rapidly financial firms can barely implement before their system or solution is nearly obsolete. Client portals are a prime example. The trade media continue to write pieces on the need to buy or build a client portal. The drivers are correct: today’s clients expect to have 24/7 access to their financial information and from a range of devices. But if you are shopping for a client portal today you are already behind the curve.

Client portals have evolved from a simple “online statement” and access to product information via a traditional desktop website to incorporating more information, do it yourself tools and access from mobile devices. However, leading firms have moved on to create comprehensive digital client engagement platforms. We conceptualize this new breed of solutions as the owning one’s Digital Financial Life (DFL)– it’s a significant leap forward in consumer expectations that includes:

  • Transparency – They want real answers to questions about investment performance and costs, especially fees, at their fingertips and in real time.
  • Anytime, Anywhere – All financial information needs to be consolidated and viewable easily via any device, at any time.
  • Intuitive, Easy to Use Interface – Clients expect an attractive and superior User Interface.
  • Self Service Tools – Clients want robust capabilities for managing their financial accounts and relationships – many prefer to manage their own investments and perform their own financial planning and risk management.
  • Integrated and Consolidated – Clients want all their financial information from diverse accounts consolidated into a single experience, including brokerage, trust, savings, mortgages, banking and more.
  • Advice Delivery – Including both automated and digital relationships with their real-life advisors. Millennials in particular are very independent in their financial habits, but even as they seek to make their own decisions they want access to advice, ideas and guidance.

Client portals, websites and apps have offered many of these capabilities in the past but not all. Users might have been able to view basic financial information, but not utilize data from across all accounts for financial planning or risk management. Such capability historically has been limited to only the largest firms with the biggest budgets.

The key concept to strive for today is client engagement. The best platforms touch clients repeatedly while providing them with a holistic experience that brings all capabilities to the client in one seamless, integrated solution. The user experience is consistent moving from mobile device to desktop to a tablet to literally walking into a branch and interacting with a live person. All the client’s information is accessible anywhere, anytime and clients can perform any tasks themselves across devices or by working with a live person. This makes the financial institution a central hub for all of the client’s financial needs.

Technology, including portals, is always touted as flexible, but the big difference today is that digital platforms support any business model. Solutions run the gamut from a complete “robo” type offering that offers a fully automated and DIY experience to a hybrid model to a heavy advice and personal touch approach. Make no mistake, even clients who need the most hand holding still desire digital access to their financial information and want the ability to perform a range of tasks, even if they never choose to utilize the functionality.

Most investors under age 50 (69%) say they rely on the website or mobile apps to interact with their primary investment firm.[1] This trend is only expected to increase. Plus, consumers are placing a high level of importance on their digital experience. The majority of investors of any age as well as 63% of investors under age 50 say they are more likely to trust an advisor who offers them access to sophisticated digital tools. Clearly, to compete for clients in this new era, firms need to be at the center of their clients’ financial needs and this requires a sophisticated digital experience.

As the industry continues to adjust to the Digital Financial Life era, the challenge of keeping up with the rapid changes will remain. While the occasional fax may be forgivable, continuing to invest and cling to outdated plumbing causes unnecessary harm to financial firms. Increasingly, clients are expecting a holistic digital experience and evaluate firms based on their technology and user experience.

[1] Wells Fargo/Gallup 2016 Survey