How Technology Can Transform The Client Experience
Are we at peak fintech? It’s hard to tell. Certainly, technology is the word on everyone’s lips right now in capital markets.
Business strategists tend to talk about technology as a driver of operational efficiency. They focus on cost reduction, automation of process, standardisation. Clearly, these are huge benefits and explain why tech is taking over financial services. But at its root, fintech isn’t just about reducing costs for banks. It’s about improving things for clients.
Well designed technology can drastically enhance the client experience, helping banks to stand out and carve a reputation for outstanding customer service. In a competitive market, giving clients a seamless experience can make all the difference.
This has been well-understood in the retail banking world for a while. Recent developments prove that the capital markets are finally taking this on board. We’ve seen some big players upgrading their client offerings with technology.
Launched in March, J.P. Morgan’s Data Once platform helps streamline KYC. The name is apt – customers need only input their data once and it’s transferred across multiple products and geographies. This overcomes a big compliance headache. In fact, Kevin Heins, MD and Global Head Of Implementations, has stated that the product is a direct result of the firm studying where commercial clients were getting frustrated. This exercise highlighted issues with sending and receiving documents, long email chains and a lack of visibility when it came to payments. Date Once addresses these challenges by centralising everything in one place, empowering the end user and helping them to take control of the entire onboarding process.
J.P Morgan’s commitment to understanding customer pain points is admirable. And it will yield long term commercial benefits. Until now, KYC has been more challenging (and expensive) than it needs to be, due to processes being siloed in different countries. Now it can be rolled out across the bank in a holistic, global fashion. This is a great example of how technology can reduce risk for banks whilst providing a better experience for customers.
Similarly, HSBC is leveraging technology to upgrade the client experience in the primary debt markets. Its MyDeal platform seeks to improve the roadshow and new issue process, driving efficiency by centralising investor feedback and logistics.
Let’s face it, roadshows have always been a headache for bankers. They’re tricky to organise and even more tricky to execute. Not any more. The new app aggregates all elements of the roadshow process, including investor feedback, profiling, client orders and deal pricing. It even tracks useful details like flight delays and contact information.
The app uses APIs to centralise data from multiple channels and present it to clients through nice visuals. Users can review live deals and old ones, too, helping to reduce needless paperwork.
Adrian Lewis, HSBC’s Head Of Equity Capital Markets EMEA, describes the tool as “bringing the capital markets into the 21st century”, and HSBC’s bankers have already road tested the app with more than 30 transactions valued at over £19bn across investment grade, high-yield and ECM deals. It’s great to see a large bank testing and iterating!
These product releases feel like a significant step towards technology becoming a more integral part of the client experience in capital markets. J.P. Morgan and HSBC have clearly decided that to maintain their dominant positions they need to offer clients more than dinners and tombstones. Of course they have the scale and resources to develop solutions in house. Expect smaller banks to follow suit by working with vendors and other technology partners.
At Origin, we try to think about our clients every day, and that philosophy has helped us grow rapidly since our beta launch at the start of 2017. We’ve now expanded to 15 dealer banks and 58 borrowers, comprising 38 financial institutions, 17 supranationals and three corporate issuers.
Our product has evolved to become a comprehensive workflow solution for the primary markets, including everything from the communication of funding targets, all the way through to the automation of legal documents. With digital documentation, we can now explore the digitisation of the post-trade workflow.
Of course, this technology is designed to bring huge benefits to banks and their employees, reducing human error, costs and wastage. But more crucially, it helps the banks enhances their clients experience, with shorter settlement times and less documentation. Just like signing into your personal online-banking, issuing a bond has the potential to be either a frustratingly complicated task, or a seamless almost pleasurable experience.
Ultimately, those that recognise this will have stronger DCM franchises that are able to attract and retain a loyal client base of issuers. Business is no longer won just on personal relationships or pricing, although these aspects remain important. Long term growth means building, maintaining, and enhancing client experiences.