Distribution Model



Technology enhances client relationships

The use of detailed personal intelligence about customers has been limited in the industry so far. There is significant potential through the application of sophisticated technologies to create customer relationship management (CRM) processes that are personalized, simple, and speedy, drawing on multiple sources of personal data.


  • Customer data and intelligence are currently based on relatively simple categorizations. Distribution models have discrete issues to consider in institutional, retail, and private wealth segments. It is in retail and private wealth that firms have the farthest to travel with new, potentially transformational technologies. Capture of personal data and its application will improve customer delivery in the context of improved communications, targeting, and customizing. Asia is likely the biggest test-bed for the application of new technologies.
  • Client data and intelligence on our current industry come from focus groups and surveys, but much is also created from ad hoc assumptions, which are proxies for more accurate, individualized data about consumer behavior. Technology advances make it possible for businesses to access much more data about clients’ and customers’ real needs and wants, while platforms and user interfaces enable better service.
  • Easier product comparisons and more frequent switching mean that provider and end investor relationships for some will become more transactional and require less time. End investors see that digitalized delivery enhances speed and personalization, which then shapes their expectations of the investment marketplace. Considerable work is needed to craft new user interfaces given the potentially complicated issues, including compliance aspects.
  • Personalization touches on investment values, and this awareness is growing fast in private wealth business models. The opportunity is for the client platform to “speak the customer’s language” in order to develop longer-term, more effective relationships.
  • In this narrative, a new business model emerges with significantly different costs. There are potentially large fixed costs in establishing platforms and digital services, and thereafter costs are low per user. Increasingly, investors (particularly younger ones) are swiftly discovering the best platforms, increasing the scale advantages.
  • The opportunities grow quickly. With big data, CRM, and hyper-connectivity, investment firms have more opportunities to meet customer needs and improve products, which enhances investor trust. In life and health insurance, wearable computing enables massive advances. Investment firms can integrate savings vehicles and life and health insurance with other opportunities in order to build platform scale.
  • Asia is the source of most innovation in this area. Western-centered investment firms can apply Asian resources to act as both catalyst and test-bed for technology innovations, for local and global deployment. As demand increases for specialized technology skills, they become harder to find, and companies that have a foothold in Asia may enjoy recruiting advantages.
  • Improvements in financial literacy will generate additional engagement with end clients. But the substantive improvements to be expected in effective distribution and engagement will primarily be the result of uses of technology rather than improvement in the traditional view of financial literacy.