Distribution Model



Technology enables customized messaging

Current servicing for customers—institutional, retail, and private wealth—is bland and communicates with poorly targeted features. The use of personal data and technology enables much better targeting using more client intelligence, behavioral savvy, nudging, and ultimately, empathy.


  • As described in the Parallel Worlds scenario, product preferences center on personalization, simplicity, and speed. To deliver these specifications, investment firms must improve their communication strategies considerably.
  • The use of technology for client engagement is growing quickly, and 51% of survey respondents say that this is their firm’s top technology priority in the coming years.
  • Financial institutions are already using AI to experiment with service that is far more personalized. The banking sector is ahead of investment firms in using AI-based client advisers, leveraging the operational data from personal profiling, past call history, and previous transactions, which are then combined with AI to improve the understanding of customers’ likely needs.
  • Soft data, even given the challenges of capturing, validating, and using it, leads to a better understanding of needs. A cautionary note: Soft data may instead be abused to play to clients’ personal biases that are wants rather than needs. The influence of regulation will grow to provide some client protections, but ultimately this area will evolve by reference to the industry’s ethical condition and the degree to which individual firms act with professionalism.
  • In this narrative, AI, machine learning, and customer analytics drive client engagement over the next decade. Financial institutions need to deliver instantaneous and well-connected transactions in which trust in the transaction’s security is increasingly strong.
  • These are baseline requirements, however, not the subject of differentiation. The best investment firms develop new forms of well-engineered engagement in which sophistication with behavioral finance will be essential.