LGT Bank (Schweiz) AG recently implemented the innovative investment communucation management solution aSpark
How LGT now delivers new investment ideas to clients in real time
Zug, May 2023
More than ever, banks and financial service providers in the investment sector are faced with the challenge of offering their customers a perfect user experience in the form of personalized investment ideas and investment suggestions. Without a corresponding software solution, however, this primarily means a lot of manual work and a high susceptibility to errors. We spoke to David Wolf, Head Research Content and Publications at LGT Bank (Switzerland) Ltd. about the current challenges in the investment office and the newly rolled out innovative Investment Communication Management solution aSpark.
David Wolf, why is LGT concerned about actively delivering personalized content to its clients?
David Wolf: As a sophisticated private bank, we want to communicate openly what we think about the markets and the economy. Especially in uncertain times like the current one with pandemics, war in Europe, inflation, and rising interest rates, it is important for us to support our clients in the best possible way and to be able to give them relevant recommendations on how to position themselves. We care about the individual portfolios and the client should know that we assist him and, if necessary, make specific recommendations.
Where was LGT before you decided to consider an investment communication management solution?
Many things have already been done at LGT, but mostly manually. We already had great stories and personalized, concrete investment ideas, but in the end, these were provided to the relationship manager without much pre-selection. The relationship manager then had to decide on his own to whom this fits and to whom he is allowed to pass which topics from a regulatory point of view, which client has already received what, and so on. The whole process was not scalable and caused further manual effort in various internal places, without any benefit for the private client. We recognized this as a clear pain point and wanted to do something about it.
The bank's digitization strategy also calls for higher personalization and speed in the delivery of content, prepared differently per channel. For this, we needed a solution like aSpark to support us in distributing the recommended content.
How was the collaboration internally before the solution was introduced? What specific problems did you face?
A big issue were the media disruptions, especially due to the lack of tooling. A large part of created content was little personalized. Content that was already personalized had to go through various programs and hands until it could finally be used on the front end. The source of errors was very high in this process. On the other hand, the manual effort required at the front, i.e. by our relationship managers, was simply too high.
What challenges does the Investment Office face in preparing and distributing personalized content?
We have limited resources and therefore have to focus on the areas that are relevant for our clients. Of course, you want to personalize all topics as much as possible, to tell an apt story that is tailored to the customer in every detail. But unfortunately, due to limited resources, this is not possible for all topics. Nevertheless, it is important to us that we provide concrete and actionable recommendations for all topics. The research should help the client and the relationship manager. We don't want to leave our relationship managers to figure out for themselves what they should now recommend to the client. We provide these concrete recommendations for all topics, be it on a sector, on a sub-asset class or on a current niche topic.. We always deliver an investable.
The Investment Office has a supporting function. Our task is to design content in such a way that it is "suitable for everyday use" by our relationship managers and clients.
The difficulty in the past was often that the Investment Office did not have all the necessary client information. It was difficult to pre-select the relevant clients who would actually be allowed to carry out the recommended action from a regulatory perspective and to personalize the content according to their wants and needs. This has now changed with aSpark.
Have the demands of customers or consumer behavior regarding investment content also changed?
Not many customers are asking for 15-page PDFs anymore. The attention span of customers has decreased on average and consumer behaviour has become more multi-medial. We have to take this into account and meet the demand for different channels and formats. However, there has not been a complete change, for example, only to audio formats or visual content, it is rather a complementary consumption. For us, that means we have to offer a little bit of everything.
In addition, there is certainly a greater demand not just to be informed about topics, but to receive a concrete recommendation for action, so that the customer can react directly, so to speak.
What role will artificial intelligence play for the investment office in the future?
Especially in the analysis of what is effectively consumed, that is, what really appeals to the customer, AI will play a big role in the future. Of course, you can simply analyze click figures, as we have done in the past, but a more detailed analysis using AI would allow us to include actual client behavior, including transaction history. This would allow us to really find out what this person is interested in. So far, we've simply captured static preferences, and that has its limitations. Because preferences change, not to mention the fact that you have to gather them in the first place. But maybe the customer is interested in other topics that we’re not aware of yet. If AI enables us to recognize these interests even better, we can create even more relevance in the distribution of content. This in turn improves the user experience. Customers are happy if they are contacted less frequently, but with more relevant content.
A big challenge was that we didn't have any suitable tooling for this until now. aSpark now offers the basis for integrating AI into the distribution process. aSpark is fed with all the relevant data and covers the process end-to-end.
Back to your decision to implement an investment communication management tool. What was the motivation behind the planned change and what requirements did such a tool have to meet?
The motivation actually came from front workshops, as this was identified as a very big pain point. It is important that the relationship manager can focus on his clients. He has a lot of different tasks and what you can effectively take off his hands, you should. Preparing relevant content from the investment office as promptly as possible and making an initial match as to which customers the content fits is a prime example of a process that can actually be taken off the relationship manager’s hands.
In the final instance, of course, it is still the relationship manager who decides how much and about which topics his customers are informed. But we want to give them the options in the background with elaborated stories and investment ideas.
It was important to us that we see the interaction of stories and concrete recommendations for action, which was already used by us but was previously mainly controlled manually, as an end-to-end process in the solution. In other words, we see everything covered, from macroeconomic convictions to the recommendation at the investment idea level, via the story and rationale, to the matching of clients and investment instruments and the subsequent actions. Without anyone else having to insert an ISIN by hand. This sounds mundane, but until now it caused a lot of effort and was a source of errors.
aSpark was the only solution that could cover all our requirements. From the macroeconomic view to the story to the customized investment instrument.
Have you already noticed any positive changes since the introduction of aSpark?
What has definitely changed for the better from the moment of introduction is the time-to-market of our content. On average, we get to customers much earlier with news and market assessments. Previously, relationship managers had to contact their customers manually by email, and when they found the time to do it. Now they can do it instantly and with just a few clicks. Within just 5 minutes, a new investment idea can be sent to a client and the relationship managers no longer have to dedicate their time to it. This is a huge time saver we recognized from day 1. Ideally, the customer doesn't notice that anything has changed in the background, because the service is still the same and the proposed solutions are still tailor-made. With aSpark, we have also managed to avoid a rift, but rather to maintain the usual continuity for the customer, while improving our process in the background. Thanks to the accelerated and automated process, aSpark offers us completely new possibilities.
Are there already future plans with aSpark?
We certainly want to create even more relevance by doing more evaluations regarding user behavior. We want to generate content internally for relationship managers and externally for our customers that is even more tailored to their preferences. With aSpark, we have now laid the perfect foundation on which to revolutionize the entire process of recording market preferences for customers. There, together with Confinale, we will now be able to take big steps forward relatively quickly.
David Wolf, Head Research Content and Publications bei LGT Bank (Schweiz) AG
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Product Manager aSpark