7 Lessons Learned from Silicon Valley

What are the traits of a digital leader in wealth and asset management? What are the steps to get there? As investment firms come to grips with massive disruption in their industry, there are lessons to be learned from Amazon’s impact on the retail industry. Here are some of the takeaways offered by executives. This information was collected while producing Wealth and Asset Management 2022: The Path to Digital Leadership. To help investment providers reinvent their business for the digital age, Econsult Solutions, Roubini ThoughtLab, and a coalition of leading firms conducted one of the most comprehensive studies on the digital transformation of the investment industry. Click here to learn more about the report.

Lesson 1: Make it easy for your customers to do business with you—John Marcante, CIO, Vanguard

Repair and Maintenance Services Concept - With Copyspace“We at Vanguard see some of the principles that Amazon was born on playing out in financial services,” says Vanguard’s Marcante. “Early on I bought something on Amazon,but got the wrong thing. I called Amazon, actually got hold of a person, and was told to just keep the wrong one without paying for it, and they would send the right one. The point was, keep it simple and in favor of the experience for the client.” Or in the words of Jeff Bezos: ‘If you want to be pioneering, if you want to be inventive, and if you want a culture that’s experimental, then you want to be customer-obsessed.’”

Lesson 2: Consider the impact of digital on your physical footprint—Vinod Ramon, VP digital advice solutions, Fidelity

Fidelity’s Raman believes that investment firms should look at events in the retail sector to better understand where their industry is heading. “In the early 2000s, people said malls could never go extinct—sure, Amazon could sell textbooks online, but I’m never going to go to Amazon and buy clothes or shoes, I need to go to a mall and try them out before I buy them. Guess what happened? Malls are closing down; my wife and I never go to malls. Now I’m hearing very similar predictions about financial services, that people will always want to meet someone in person in a branch before they throw in $100K. I think that’s going to change, maybe not right away, but as people start getting more and more comfortable with digital as a medium, that will happen in the next 5-6 years.”

Lesson 3: Be digital first, but not digital only—Neesha Hathi, chief digital officer, Charles Schwab

Amazon’s opening of multiple bookstores around the country and recent acquisition of Whole Foods reflects the importance of an omnichannel approach integrating both digital and personal. “If you think about the integration of the channels in retail, it’s advanced so quickly, but generally not as fast in investment management,” says Hathi. “Because we’re trying to bring the multi-channel experience to all investors, it’s more similar to the retail model for us than for firms whose business model is digital for the low end and human for the high end. We want to be able to provide a human to everyone who needs the human: Sometimes that happens at a local branch, but sometimes it happens over the phone or on video conference with one of our contact centers.”

Lesson 4: Get control of customer data—Yoni Assia, CEO, eToro

Building the Web Infrastructure - Servers and Networks - With CopyspacePart of Amazon’s success is its huge database on 152 million customer accounts. IfeToro’s Assia, a successful fintech entrepreneur, suddenly headed a large incumbent, he would do two things very differently—more like Amazon does. “First, I would gather all of the customer data of the organization, across all of the multiple business units, and held in multiple databases and captured through every possible touchpoint, to get a clear view of each customer’s interaction with the company,” says Assia. “Second, based on what I learned, I would develop products focused on the consumer.” He would “definitely put it all on the cloud,” so that he could drive rapid product innovation by creating APIs to connect with various technological solutions and Fintech products. Says Assia: “I would harness the biggest advantage of any large financial institution—its trusted brand.”

Lesson 5: Think audaciously—Chris Peretta, chief information and operations officer, Bank of Toyko – MFUG

To stretch the thinking of his colleagues, Bank of Tokyo-MUFG’s Perretta poses the following theoretical question: “Say we now have infinite computing power at our disposal. What would we do with it?  We need to start thinking as audaciously as Amazon does. He says firms need to think about their back offices and portfolios like factories or warehouses, despite all the controls and compliance rules they need to apply. “You have to have a mindset like Jeff Bezos, saying there are no people here—we automate everything. They’re relentless about it.”

Lesson 6: Explore platform as a business model—Wiwi Gutmannsbauer, global head of omnichannel management, UBS Wealth Management 

A key to Amazon’s success is an open platform model connecting thousands of providers of goods and services with millions of consumers. Taking a leaf from the Amazon lesson book, over the last year BBVA, Citi, HSBC, Capital One, just to name a few, have opened their APIs to third-party developers. For UBS’s Gutmannsbauer, the shift to platform model may be the biggest change for investment firms over the next five years. “I believe that the financial industry will go through paths of disintermediation where parts of integrated value chains might be attacked and where you might find individual players covering different spots. I see a further convergence of the industry with the platform economy, meaning firms finding more and more ways to engage with the big platform players.”

Lesson 7: If investment providers don’t step up, Amazon will step in—Mark Smedley, VP, financial services, global industry lead, Oracle

Business Management and Strategy with Chess Set and Financial ChartAccording to a 2015 PwC survey, more than half of bank executives in the US indicate that alternative players and tech giants are a threat to their business.  A 2017 survey from Accenture showed that roughly one in three banking and insurance customers would consider switching their accounts if companies like Amazon, Google, Apple, and Facebook offered financial services like wealth and asset management.  Oracle’s Smedley muses: “What happens then? I see that on the horizon—lots of evidence that smart players are already moving in that direction.  Your strategy can’t just be how do you differentiate from your existing competitors anymore, but how do you live and thrive in this new digital economy when Mark Zuckerberg, Jeff Bezos, and Tim Cook decide that their platforms can offer a variety of financial services?”

Note: On Thursday, February 8, 2018 Louis Celi, Founder and Cheif Executive of Roubini ThoughtLab will join Appway for a webinar discussing the Steps to Digital Leadership in Wealth and Asset Management. To learn more and register for the webinar, click here.


Louis CeliLou_Celi is Founder and Chief Executive of Roubini ThoughtLab. With over 35 years of research, marketing and publishing experience, Lou has helped top organizations build their business with global executives.

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