What does innovation mean to you?
Being a steward of innovation isn’t only about developing new products. Innovation should also extend to the way customers are serviced. This is critical in the asset management industry because of advancements that have increased competition in the space.
Barriers to entry in the asset management industry used to be very high. But recent technology has made it easier for new players to enter the market and provide investment management services to consumers. Technology has changed the way that people interact with companies. As a result, consumers expect more from their products and of their services. Asset management companies are no exception to this rule.
Investing in technology and digital capabilities has become one of the most popular trends within the industry and likely in many other industries. We recently made management shifts to build out these skills on our internal team, in recognition of its importance.
Strong investment performance is no longer a guarantee of higher market share, and asset managers have needed to ramp up their “execution game” to differentiate themselves, according to perspectives from Boston Consulting Group (BCG). BCG said many of the most successful managers today focus their efforts on marketing effectiveness, salesforce productivity and enhanced customer experience.
The reason for our increased focus on digital capabilities is to be able to provide our clients with the kind of real-time service that they now expect, and to develop new ways of engaging current and prospective consumers.
Adopting an innovative mindset is not limited to management
Adopting an innovative mindset is not limited to management. We encourage our entire firm to think innovatively. It is really something that becomes embedded in the culture because without this being a part of the foundation, innovation would be even harder to achieve.
Innovation is part of the foundation that contributes to a thriving business, which in turn helps build a robust industry. Innovation is the fuel that helps businesses push new and better products and services to benefit consumers. Without innovation, we would still be using the same tools we did hundreds of years ago and without such services as high-speed Internet.
In general, innovation can take years and a lot of manpower to accomplish. In finance, there is an additional challenge. While innovation is typically regarded as positive, innovations in finance can strike the opposite reaction. The reason for these misgivings is the complexity of financial products.
Many consumers already have a difficult time trying to understand finance. There is an existing lack of financial literacy in the U.S., according to the National Financial Educators Council.
While the financial industry has a reputation of being behind in technology, we believe the industry, and the asset management segment in particular, has profound abilities to scale innovation that will improve financial services for consumers.
We’ve learned a lot so far and expect to learn more as we progress. The learning never ends. But that’s the whole point because after all, that’s what innovation is all about.