UK retail financial organisations are failing to achieve a multi-channel approach to wealth management services, according to a new study from TCA Consulting.
The report, "Wealth Management - The BIG Picture" reveals that too many retail finance providers are stuck in a rut, with customers still accessing their services via traditional channels, such as the telephone or via high street branches. Despite all the hype, the majority of institutions have failed miserably to properly develop services for the burgeoning Internet channel - let alone WAP, PDAs or Digital TV, finds the research.
TCA Consulting has developed a Wealth Management Index which rates 61 organisations on a series of criteria, including the number of products they provide and the range of distribution channels (e.g. Web, branch, telephone, ATM, digital television, WAP phones and personal digital assistants (PDAs)) over which these products are supported. The companies are then ranked according to their ability to provide a multi-channel wealth management service.
Steve D'Souza, managing consultant at TCA Consulting's retail financial services practice, says: "Comparative rankings reveal that some of the organisations that have sold themselves on the high quality of their online services are lagging well behind competitors who have been wrongly regarded as weak in digital services, while the real wealth management pioneers are often unexpected."
The research shows that despite a degree of hype over multi-channel integration, less than 50 per cent of the Web sites surveyed claim their institution support more than one of the alternative channels. While 79 per cent of institutions support the telephone as an access point, only three out of the 61 companies surveyed support five channels or more.
The vast majority of retail financial organisations offer only a few transaction-based services, such as e-banking and share-dealing, via the Web, says TCA. Only three providers (5%) offer bonds online, with none at all supplying account aggregation services via the Web.
This slow take-up of account aggregation does not compare well with the experience in the United States, says Paul O'Connor, head of TCA Consulting's New York office: "On this side of the pond, account aggregation has taken off in a big way as numerous retail providers take the plunge and offer both effective and popular services to the mass affluent market."
There was little evidence of support for new channel access points. Only four per cent of surveyed institutions offer services to PDA users and 13 per cent to digital TV viewers. However, 34 per cent support at least some of their products using WAP.
D'Souza says there are many reasons why institutions offer such a poor range of channels, including regulatory restrictions, ease of integration and the ready availability of outsourced services.
He concludes: "The trend in the long term is away from transaction based services and towards the development of fund supermarkets and advice-based products...The race is therefore on to achieve the critical mass of services and channels which will enable a few of the quickest institutions to leap ahead of their competitors."