%ULHÀQJ -RKQ5RODQGHU … desktop and laptop computers. ... recent example of a wealth management...

Briefing John RolanderSrini VenkateswaranKunal VaedMichael Horvath

The Wealth Advisor’s New App How Tablets Can Transform the Retail Wealth Management Business

Booz & Company2

EXECUTIVE SUMMARY

Tablets and smart phones have become a critical channel through which financial advisors can interact with high-net-worth clients. Tablet-based applications provide many benefits for clients, advisors, and wealth management firms. These benefits include improved client experience, increased advisor productivity, and reducing the cost to serve.

This Briefing explains the promise of mobile computing for retail wealth management, and how to achieve the right capabilities. It focuses on eight critical imperatives for building a leading-edge tablet app:

1. Ensure a shared understanding of the overall strategy by assessing user needs and usage patterns.

2. Offer an intuitive and engaging user experience based on a rich interface design.

3. Design applications with “tablet-specific” functionality, instead of merely porting desktop applications to the tablet.

4. Partner with best-in-class design and development firms to reduce time to market and close skill gaps.

5. Sequence development along a path—from wireframes to static prototypes to integrated applications—that ensures constant learning.

6. Use an agile approach for a “lean” software development cycle that iteratively incorporates end-user feedback.

7. Design mobile applications to be integrated into the enterprise architecture, enabling rapid deployment.

8. Rebuild middle- and back-office processes to amplify the benefits of tablet interface design.

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THE NEW DIGITAL CLIENT

“The tablet channel,” says Booz & Company senior partner Paul Hyde, “is going to be one of the most important ways—perhaps the most important way—of reaching the affluent client. It is also going to be the primary channel for building loyalty among the emerging younger affluent generation.”

Clients are rapidly adopting tablets to track their financial assets (see Exhibit 1) and interact with advisors (see Exhibit 2). “What else lasts for 10 hours on a single battery charge,” asks one financial advisor, “and can be used from almost anywhere in the world with a 3G connection?”

Exhibit 1 Use of Mobile Devices for Financial and Account Management

Source: VIP Forum Webinar, “Integrating Digital Channels into the Service and Advisory Experience,” May 2012

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PERCENTAGE OF RESPONDENTS—TO A 2011 SURVEY CONDUCTED BY THE FINANCIAL SERVICES MARKETING FIRM HNW—SAYING THEY USE MOBILE DEVICES FOR THIS PURPOSE

56%

ConductTrades

SmartphonesTablets

Pay Bills

ConductInvestment

Research

AccessAccount

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76%

45%70%

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26%

42%

Exhibit 2 Financial Advisors Are Open to Replacing Laptops with Tablets

Source: Survey of 100+ financial advisors; Booz & Company analysis


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IN WHAT CONTEXT WOULD AN ADVISOR REGULARLY USE AN IPAD?(PERCENTAGE OF ADVISORS WHO RESPONDED)

56%

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SmartphonesTablets

As a replacement fora laptop—when I’m onthe road or on vacation

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76%

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As a replacement fora laptop—outside

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THE ENABLING TECHNOLOGY

The tablet is more important than other devices in this new era of computer-enabled services. Its sales reflect that dominant role (see Exhibit 3). The iPad growth ramp has dwarfed that of all other i-products by a factor of three.

The tablet can be a vehicle for driving automation in the middle and back offices, by facilitating straight-through processing of transactions without manual intervention. It also facilitates richer digital interactions between clients and their advisors.

The impact of the tablet is reinforced through three other technological trends. First, cloud computing—the availability of software and information services through the Internet—allows processing to take place outside the device, so it can be smaller, lighter, and more effective. Second, the proliferation of high-speed communication protocols (such as 4G, LTE, and 3G) enables the seamless rendering of high-fidelity, data-intensive applications on tablets. Third, the continued evolution of semiconductor power (as defined by Moore’s law) enables tablets to offer significant device intelligence, on a par with desktop and laptop computers.

THE COMPETITIVE NORM

As financial services firms embrace tablets, the competition to provide features and services is rapidly advancing. New ventures are continually introduced, and laggards may be left behind. As of late 2012, advisors are using prominent tablet applications in a variety of wealth management firms, including:

• Fidelity Investments, which enables advisors to view accounts, trade, and track activity on Android/iPhone platforms

• TD Bank Group, which provides real-time quotes and market news and data along with access to consolidated and single account views

Exhibit 3 iPod vs. iPhone vs. iPad Sales

Source: KPCB Internet Trends, June 2012


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CUMULATIVE GLOBAL SHIPMENTS, FIRST EIGHT QUARTERS AFTER RELEASEIPOD VS. IPHONE VS. IPAD

56%

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• UBS, which offers a tablet app that provides advisors with a variety of tools, including e-mail, contact management, access to research, and customer account details

Firms providing applications that are used directly by end clients include the following: • Bank of America, which offers its clients (and those of Merrill Edge) in-depth BofA

Merrill Lynch research reports, remote deposit checking, holistic balance information across all linked BofA accounts, and trading tools

• Charles Schwab, which offers its clients research tools—including news, charts, and analysis on a variety of securities—along with tracking alerts, portfolio management tools, and trading capabilities across ETFs, mutual funds, and options

EIGHT CRITICAL FACTORS

These are the most important imperatives for building a leading-edge tablet app. By developing these eight practices, and integrating them together, any financial services institution can establish a competitive capability in mobile banking (for both tablets and other mobile devices). Banks that invest in these practices and develop distinctive creative approaches can differentiate themselves among clients.

1. A Differentiated Tablet StrategyImperative: Ensure a shared understanding of the overall strategy by assessing user needs and usage patterns.

Relevant stakeholder groups should agree on the tablet strategy, with a shared understanding of users and usage patterns. Three factors are critical for defining the purpose and use of the app and how it fits into the firm’s strategy:

1. Usage occasion: Where and how will the financial advisor use the tablet (and the wealth management app)? For example, will it be used before a client meeting, during a client meeting, and/or after a client meeting?

2. User role: Which user segments are best served by this app’s functionality, and how will the objective differ by role? Examples include financial advisors and sales assistants.

3. Channel: Is the objective to develop a cross-channel application or will the application be directed toward a specific user group?

2. A Distinctive Design Imperative: Offer an intuitive and engaging user experience based on a rich interface design.

Leading firms offer relevant content that is specific to the user and context. They typically do this through easy-to-use icons and widgets. Popular tablet applications offer rich graphic visualizations to present data that “gamify” the overall client experience. One recent example of a wealth management firm’s tablet application shows the intuitive

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nature of good design with simple screens that respond to a user’s expected interests and needs with illustrative graphics (see Exhibit 4).

Exhibit 4 Citibank’s Tablet Application Design

Source: Forrester case study on Citibank’s iPad app, 2012; Booz & Company analysis

Graphic cues (such as clicking on a dot to see an account’s activity) help people easily drill down to the information they need. Most features, including sign-on, are designed to look and feel intuitively clear.

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3. The Tablet’s Distinguishing Features Imperative: Design applications with “tablet-specific” functionality, instead of merely porting desktop applications to the tablet.

Applications should be deployed to take advantage of the unique tablet form factor and functionality, delivering a differentiated user experience. Adapting legacy applications from desktop computers is not effective because those earlier applications have evolved in an unstructured way and are typically hard to navigate or browse. They lack the design principles that make tablets successful, and will not provide clients or advisors with the functionality or elegance they expect.

Tablet devices have unique capabilities (such as gesture-based navigation, voice recognition, and GPS integration) that can be applied in distinctive new applications, as demonstrated by a recent tablet-oriented app from Citibank (see Exhibit 5).

Exhibit 5 More Citibank App Elements

Swiping and flipping to navigate between screens (at the caret at upper right) makes for easy flow between tasks (such as checking account balances in this case).

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Exhibit 5 (Continued) More Citibank App Elements

Source: Forrester case study on Citibank’s iPad app, 2012; Booz & Company analysis

A group of analytic tools allow for real-time comparison of financial transactions and balances on command.

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4. The Right PartnerImperative: Partner with best-in-class design and development firms to reduce time to market and close skill gaps.

Some organizations lack all the skills and expertise they need for indigenously deploying a world-class tablet-based application. Different capabilities are required at different points in the development life cycle. Therefore, it is often better to augment in-house staff capabilities with best practices from outside. Reducing time-to-market and closing critical skill gaps are primary reasons to partner with vendors.

When selecting vendor partners, evaluate them based on specific capabilities that match each stage of the project. There are three opportunities for partnership in building a leading-edge tablet application:

1. Pure-play design: Creating the application design and user experience (examples include Digitas, Fjord, Human Factors International, Ideo, Markit, Razorfish, Sparks Grove, and VML)

2. Mobility platform: Customizing and rebranding more generic (“white label”) appli-cations, with some back-end implementation (examples include Finantix, Fiserv, Framehawk, Intuit, and Kony)

3. System integration: Comprehensive application development, with full back-end inte-gration into financial services processes (examples include Accenture, CapTech, CSC, IBM, Infosys, Perficient, and Wipro)

5. Three Stages of PrototypesImperative: Sequence development along a path—from wireframes to static prototypes to integrated applications—that ensures constant learning.

Put the right sequence of user-interface prototyping in place. A formulated prototype development cycle cuts time from months to weeks. There are three sets of prototypes:

1. “Wireframes” (initial prototypes), which should be used in initial design iterations to identify application requirements and review preliminary application designs with users and other stakeholders

2. Static prototypes, which can incorporate additional design elements (such as buttons and visual styles), presenting a view of how the application will appear on a tablet device and providing an opportunity for further refinement before developing an interactive prototype

3. Interactive prototypes, which are critical to understanding how end-users will actu-ally use the device and to generating buzz among stakeholders; a prototype is a low-cost method of validating requirements and usability

6. An Agile Approach to Development Imperative: Use an agile approach for a lean software development cycle that iteratively incorporates end-user feedback.

You can leapfrog past traditional development constraints by incorporating consumer insight as you iterate. Significant user interaction is required to refine the application design. Continuous engagement of users through an iterative approach allows for the incorporation of user feedback and ultimately drives greater end-user adoption.

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The iterative methodology fosters innovation through a “test and learn” approach. Requirements and specs change as insights emerge from customers and early users (see Exhibit 6). User requirements are typically not well understood up front and require continuous refinement to deliver a high-quality end product.

7. Integrated ImplementationImperative: Design mobile applications to integrate into the enterprise architecture, enabling rapid deployment.

The application is designed to integrate into the enterprise architecture, enabling rapid deployment. The application must connect the front end (the tablet) into the enterprise’s back end. Mobile and tablet-based applications should not become a stand-alone platform that drives greater technology complexity and becomes difficult to extend and maintain.

Enterprise architecture guidelines need to be expanded to incorporate tablet-specific requirements (such as authentication and authorization) and to integrate the tablet apps with other services and workflows. Implementation of tablet applications provides an opportunity to develop common services that can be used across mobile, Web, and desktop applications.

8. Complementary InfrastructureImperative: Rebuild middle- and back-office processes to amplify the benefits of tablet interface design.

Redesigning the client-advisor interface using a tablet-based application provides a once-in-a-lifetime opportunity to rethink middle- and back-office processes. Integrating tablet-based applications requires the development of service-oriented architecture (SOA), an efficient software development philosophy that can transform legacy IT environments to be more flexible. Tablet-based applications can provide the impetus for a broader SOA-based transformation. Leading institutions are rethinking process design by eliminating

Exhibit 6 The Test-and-Learn Agile Development Approach

Source: Booz & Company


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CUMULATIVE GLOBAL SHIPMENTS, FIRST 8 QUARTERS AFTER RELEASEIPOD VS. IPHONE VS. IPAD

56%

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AGILE DEVELOPMENT APPROACH

Planning

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non-value-added activities, automating approvals where possible and using workflow-based approaches to provide better process visibility. Using a tablet-based application in the front office provides the momentum needed to move to a broader digital model with electronic disclosures, pre-filled-out application forms, and good systems integration.

CONCLUSION: THE BENEFITS OF TABLET-BASED WEALTH MANAGEMENT

Retention and Productivity of Financial Advisors• Advisors can be offered client prospects and cross-sell opportunities on tablets, driving

additional revenue. • Advisors can input trades and service requests away from the office, allowing faster

responses to clients and higher productivity. • Advisors can be more effective in opening accounts and financial planning while on

the go.

Cost-to-Serve• Tablets have electronic signature capabilities that advisors can use to capture client

confirmations on the spot and reduce back-and-forth paper trails with the client. • The tablets can capture payment—including card scans, check captures, and document

scans to reduce paperwork and improve efficiency. • Tablets can provide a mechanism to drive transformation in the middle and back

offices, in part because client data is now entered in a digital format. This reduces the need for manual validation, approvals, and data entry, and leads to dramatic cost sav-ings. For example, financial institutions can expect to see 10 to 15 percent in expense savings in the account opening and trade processing processes.

Client Experience• Push alerts and client dashboards or key performance indicators can be made available

on tablets, providing advisors with client items that require high-priority attention. • Tablets facilitate the automated generation of professional-looking client proposals

with the ability to e-mail them to clients.

Think of this as both a short-term source of revenue and a long-term initiative. You are building the capabilities you need to attract and hold the loyalty of customers and their families—potentially through the next generation.

Booz & Company is a leading global management consulting firm focused on serving and shaping the senior agenda of the world’s leading institutions. Our founder, Edwin Booz, launched the profession when he established the first management consulting firm in Chicago in 1914. Today, we operate globally with more than 3,000 people in 58 offices around the world.

We believe passionately that essential advantage lies within and that a few differentiating capabilities drive any organization’s identity and success. We work with our clients to discover and build those capabilities that give them the right to win their chosen markets.

We are a firm of practical strategists known for our functional expertise, industry foresight, and “sleeves rolled up” approach to working with our clients. To learn more about Booz & Company or to access its thought leadership, visit booz.com. Our award-winning management magazine, strategy+business, is available at strategy-business.com.

Contact Information

Chicago Michael HorvathSenior [email protected]

New York John [email protected]

Srini [email protected]

Kunal VaedPrincipal [email protected]

About the Authors

John Rolander is a partner with Booz & Company based in New York. He specializes in assisting financial institutions to define competitive strategies, improve financial performance, and mobilize employees throughout the organization.

Srini Venkateswaran is a partner with Booz & Company based in New York. He advises financial services clients, specializing in strategy and organizational effectiveness.

Kunal Vaed is a principal with Booz & Company based in New York.

Michael Horvath is a senior associate with Booz & Company based in Chicago.

Booz & Company©2012 Booz & Company Inc.

Also contributing was Booz & Company associate Louise Tay.

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