Why a hybrid platform is the answer to banks’ digital advisory woes

Customers seek confidence and clarity from financial advisers.

Too much of anything is the beginning of a mess, interior designer Dorothy Draper once said, and it’s a reality that financial institutions may want to take heed when it comes to creating new banking experiences.

“Too many experiences, offline or online, are not yet designed with the benefits of Human Centered Design Thinking,” said Laurent Bertrand, CEO and co-founder of BetterTradeOff. “The constraints of the banks, rather than the needs of the customer, too often come first. This is improving but as an industry, we still have some work to do to match what everyone is experiencing, and thus expecting, from digital leaders.”

Speaking with Asian Banking & Finance, Bertrand noted that despite the enormous investment that banks have sunk into technology– US$70b from major US banks alone in 2021– most consumers remain diffident on completing complex banking activities by themselves online.
 
“One of the reasons is that existing online wealth planning solutions are either too simple to provide the clarity people want and need, or too complex to provide people with sufficient control when using them on their own. The result is a lack of confidence in the process and the results,” Bertrand noted. 

On the other end of the spectrum, the traditional advice model meanwhile suffers from transparency issues, leading consumers to question whether they really are receiving the best advice and product recommendations. 

“Traditional financial planning can be a complex, slow and often intrusive process that, for most, requires the support of a professional adviser - advisers who are often available only to the wealthy, or in some cases not believed to have their client’s best interest at heart,” Bertrand said.

Hybrid is key
Bertrand touts a digitally powered hybrid model– where customers and advisers plan together on the same platform–as the answer to meeting customers’ yearning for financial independence and transparency from financial advisers. He shared that from their experience, they noted higher up-sell and cross-sell delivered by those using hybrid platforms, with revenues increasing by up to and even over 20%.

“From our work with leading global banks and insurers in Singapore, HK, the Philippines, Dubai, and Switzerland, we’ve seen a number of benefits. Firstly, the better client engagement you get with a highly visual and interactive platform empowers customers to be fully in control of their financial decisions. That clarity leads to higher confidence, and higher confidence leads to action,” Bertrand noted.

This leads to the second improvement–faster and higher sales. 

“Advisers have the data and tools to demonstrate the value of their advice when recommending products. Finally, the demand of society for higher ethical standards and greater digital convenience drives the need for a platform that delivers a compliant and intuitive journey while managing the complexity associated with sound financial advice in the background,” Bertrand said.

C&C: Confidence & Clarity
One key observation that Bertrand and BetterTradeOff saw from wealth management customers’ behaviors is that confidence is a key expectation they seek from financial advice.

“What they want most of all is confidence that they’re doing the right things financially for their future. The future can be a scary place. And many people have limited financial knowledge. There’s a seemingly unlimited amount of information online, but this can be confusing and overwhelming at times - which only serves to create more anxiety,” Bertrand said.

Banks and financial management institutions in particular must be able to clearly answer customers’ needs– such as how much they need to retire and still be able to enjoy the lifestyle they desire, whether they have enough coverage from the unexpected, amongst others. 

“Customers usually want a quick answer to their questions to start with, but usually don’t stop there - [they seek] further reassurance about their decisions before committing. This requires the capacity to explore options on their own, in the privacy and comfort of their home, without the feeling of being judged, while at the same time accessing expert advice to select the right product to address their needs,” Bertrand concluded.

This is where technology can come in. For example, BetterTradeOff offers a platform that delivers the 80-20 rule online, with a volume-based commercial model that makes it affordable even in markets where FIs don’t have a large wealth presence. They do this by offering a platform that enables banking customers to build a financial plan on their own in 15 minutes, that is also sophisticated enough to need collaboration with an adviser.

“Technology can help people answer many of these questions on their own, or collaborate with advisers in a transparent manner, so they can see for themselves what they really need, and make decisions with more control, clarity, and confidence,” he said.