It’s no secret that digital transformation is the future of financial services. So why hasn’t your firm taken the plunge?
Embarking on a digital transformation can seem overwhelming or something that applies to other firms but not yours. But no matter your specialty or size, all firms need digital transformation to prepare for the future and better serve clients and employees.
Here are five signs it’s time for your firm’s digital transformation:
1. Your Firm Isn’t Growing
A variety of factors contribute to a firm’s growth, but if your growth is stagnant or slowed (or even worse, declining), a lack of digital transformation deserves at least part of the blame.
Clients increasingly want digital solutions and look for firms and advisors who can provide streamlined digital tools. Internally, a lack of digital cohesion can slow processes and growth. Humans are limited in the number of clients they can serve when using analog systems. But digital transformation creates scalable systems and opens the door to limitless growth potential. One study found that financial institutions that digitize processes can increase revenue by up to 20% and cut costs by up to 25%. Those numbers are huge in moving your firm beyond stagnant or lacking growth.
2. Advisors Spend More Time on Tactical Tasks than Strategic Thinking
How do your advisors spend the bulk of their days? If they are stuck using outdated and siloed systems, they are likely wasting time on tactical tasks that could be better spent reaching out to clients, creating a big-picture vision, and growing the firm. Even the seemingly small tactical tasks like sorting through files, switching between systems, and manually communicating with clients add up and take time away from more productive and strategic tasks.
A firm using traditional methods may have to manually search paper files to find client information, navigate multiple systems to track their accounts, and then reach out to them individually to provide an update. But a digital transformation firm gathers all client information in one place to automatically send updates to clients, making it easier for advisors and clients to be on the same page.
3. Rise in Operational Costs is Outpacing Revenue Growth
Many advisors want to do more with less to grow their firms, especially during turbulent economic times. But if your operational costs are increasing, you likely need a digital transformation to reduce unnecessary costs, streamline processes, and adopt a leaner digital model.
The cost of storing and maintaining physical files, updating old technology, and manually sorting data is increasing. But according to Bain researchers, “Companies have to find ways to manage spending on technology that runs the business, while investing more in technology that grows and improves the business.”
4. Your Data is Siloed
If your client data is repeated on multiple systems or stored primarily on analog or paper files, you need a digital transformation. As firms grow, data can become siloed between various advisors, groups, and systems, which creates repetitive processes, slows client services, and limits collaboration.
But a digital transformation can break down silos for a single source of cloud-based data and files accessible to the entire firm. Streamlined data allows for better client services and more effective internal systems. Connecting data for better ease of use, personalization, and on-demand services has been linked to increasing customer satisfaction.
5. Your Morale and Productivity are Low
Is engagement down for both staff and clients? It could be because of a lack of digital transformation. When advisors and staff have to manually sort through data and take longer to open and service accounts and respond to clients, it weighs down the morale of everyone involved. Instead of looking forward, firms without a digital transformation routinely look backward, stifling engagement and innovation.
Digital transformation does more than add digital tools to a firm — it “realigns the organization to a singular vision.” That improved vision guides advisors and staff and can provide a sense of purpose and direction to boost morale. That increased productivity and engagement comes through to clients, who can engage with the firm in new ways to build stronger relationships.
In today’s connected world, digital transformation isn’t just nice to have; it’s a requirement for all modern financial firms. If any of these five signs apply to your firm, it’s time to invest in digital transformation. Contact Docupace today to see what we can do for your firm.
