Harnessing Technology to Transform Client Relationships

Featuring Shannon Dolan from FIS

Private capital firms are increasingly asking how they can make it easier for their clients to invest with them. Today’s investors expect the same type of digital customer experience they get when opening a personal bank account – and their expectations are only set to grow. With this in mind, what could a more unified customer experience look like in the future? Shannon Dolan, SVP, Head of Asset Management and Private Markets at FIS explains why firms need to take action sooner rather than later in order to meet the needs of today’s sophisticated investors. 

Seeking a Compelling User Experience

It’s no secret that the needs of investors are changing – from a greater focus on Environmental, Social and Governance (ESG) to an appetite for a wider range of investment types than in the past. In this climate, investors are seeking additional flexibility from private equity General Partners (GPs), particularly as more funds begin to embrace a longer-term capital strategy. 

At the same time, there is a growing emphasis on the need for a more sophisticated and convenient user experience. Younger people in particular are used to a slick user experience in the retail context – and as they begin investing in private capital, they will not look favorably upon seven-page due diligence documents that have to be printed and signed. Instead, they will look elsewhere for convenient app-based alternatives.

Pulling up metrics may be a straightforward exercise for investors who have access to a portal with the right dashboards. But without the right technology, getting the necessary information can involve a lengthy and time-consuming chain of communication – meaning that investors have to wait for the information they need. Of course, investors are not going to overlook negative returns in their pursuit of a good customer experience. But the fact remains that if two funds are otherwise equivalent, investors are likely to opt for the fund that is more responsive, and that offers better access to data.

“Investors increasingly expect a smooth and intuitive user experience,” says Shannon Dolan, SVP, Head of Asset Management and Private Markets at FIS. “So, it’s essential that firms provide their investors with a robust portal and user-friendly dashboards, and work with vendors that fully understand the underlying client’s priorities and needs.”

Looking forward, the possibilities of a more rewarding user experience will continue to become more compelling. As cloud adoption increases, investors will increasingly be looking for a single, unified experience which gives them more ownership over their own data across multiple funds. This need will be met by centralised portals that provide GPs and investors with a clear view of aggregated data. Instead of having to log into 12 different systems with 12 different passwords, investors will be able to log into a central system with a single user persona, streamlining their user experience and eliminating the inconvenience of using disparate systems.

No Time like the Present 

At this stage, many firms have not yet started automating the experience they offer investors. Putting the right processes in place involves people, time and technology – and smaller funds, in particular, may not feel it is the right time to make this type of investment.

But delaying your technology investment is a risky move, even for smaller fund managers. For one thing, as a fund grows it tends to attract larger investors who expect white-glove service, and who have experience of many different funds. Another consideration is that undertaking a big data migration is likely to be considerably more time-consuming and difficult if you leave it until further down the line. 

The good news is that some technology providers offer a lower point of entry. This gives smaller firms the opportunity to get the tools they need in place and start using them today, while positioning themselves for future growth. This includes putting in place investor servicing solutions that are aligned with investors’ evolving needs. 

Beyond User Experience

That said, it’s not just about the user experience you provide for your investors. Today, firms are looking for systems that are flexible enough to meet evolving regulations, collect data in a nimble way, and incorporate Artificial Intelligence (AI) and machine learning into the data collection process – all while taking full advantage of automation.

Security is another important consideration where technology is concerned. Cybersecurity is an increasingly important differentiator – and of course, it’s important for firms to house data in a system that includes the checks and balances needed to minimise the risk of error, as well as providing auditability and traceability around cash movements.

Last but not least, a technology partner that offers a frictionless flow of data can help you make faster and better decisions about where and when to place capital. Armed with accurate and timely data, you will be ready to compete effectively, secure the best deals, and keep your investors happy.