How Financial Service Companies Misunderstand The Drive For Digital Solutions

Adam Fayed, CEO of adamfayed.com.

During the pandemic and the early days of associated lockdowns, there was a lot of talk about how Microsoft Teams and Zoom were replacing face-to-face communication within financial services. Deloitte published an article that stated, “As advisors and other staff processes become more digitised, 30% of us will see a more digital engagement eventually take precedence over the more traditional face-to-face way of life.”

As a wealth management specialist who went remote years before Covid-19, I think the idea that video calls will take over is not only vastly underestimating consumers’ preferences for remote communication, which far preceded Covid-19, but it also risks missing a wider trend in consumer tastes.

Misunderstanding The Role Of Technology

Before getting into the specifics, I invite you to consider something: The last time you went to the airport, did you use the staffed or e-gates? When you last visited the local supermarket, did you use the self-checkout or the traditional one?

For many people, the answer is obvious. The “non-human” option is often faster, less intrusive and more efficient. What is more, there are staff available if something goes wrong and the e-gates don’t read our passports correctly or the scanner fails to pick up the right bar code.

Yet I’ve found that too many people assume the financial services industry, especially in the high net worth segments, is different because it requires high levels of trust. In such situations, they assume clients want to be met in person, on video, or even wined and dined after a few rounds of golf. Even some people who speak more progressively still assume that investment clients expect face-to-face or video interaction at the beginning of a relationship with their wealth advisor—before technology comes in.

As someone who specializes in the expat and high net worth niche and has been working completely remote since 2018, I’ve found these assumptions are wrong. I have been dealing with wealthy clients remotely for years, including older people and those from cultures where in-person communication has traditionally been preferred.

In my experience, the vast majority of clients don’t need to be met or called on video. They don’t even need incredibly high-tech solutions. They just want companies and individuals whom they trust to get the job done and sort out their problems as soon as possible without loads of unnecessary processes.

This shouldn’t actually come as a big surprise. Imagine you are a high net worth individual who has struggled to get money out of China for years. What would you want? Two or three video meetings to “build up trust”? No, you would likely want somebody you already trust, either from a referral or from their reputation and online content, to sort out your problem and pain points as soon as possible.

Building Trust Online

Trust can be built online just as easily as offline. I, like many people these days, have far more trust in an expert who has countless online recommendations and who shares their knowledge widely, than in someone going down the traditional route of building trust over various client meetings.

I have witnessed an increasing trend in the last few years, where the majority of consumers prefer email, text messages or regular phone calls via apps over video calls. When I ask new and potential clients which communication method they prefer between email, voice call, WhatsApp texting or video call, only 3% have picked video call.

Even as far back as 2016, 72% of customers in one study stated that they prefer email as their main channel for business communication. And this isn’t just a trend among younger consumers. In my experience, many high net worth individuals are often too busy or impatient for the right solution, or they are worried about an overly pushy process over video call.

What could cause such a mismatch between consumer behaviors and the processes that many firms deploy? I think part of it is that many people won’t openly admit in consumer research to preferring email and texts to video calls as it can sound anti-social. Beyond that, many firms are run by people in their 30s or much older, who started out being mentored by older people who were convinced that business is best done face to face. For many of these people, video calls are a stretch, even during a pandemic. Anything less personal seems a stretch too far.

Finally, we do have to remember something that hasn’t changed for decades: Namely, consumers need to trust people before doing business with them, especially remotely.

I’m guessing most people would do business remotely with Warren Buffett or some of the biggest brands in the world, and many would even work remotely with their favorite YouTuber. I think the main thing that has changed is that the internet has allowed a larger pool of financial services firm to have remote clients.

The issue financial services firms face is establishing trust online, rather than assuming that clients prefer in-person or video communication. The question is, how can professionals be heard and build trust in a crowded online space?

While there might not be any easy answers, there are two commonalities I have observed. Firstly, patience and persistence is key, like in any endeavor. It takes time for an audience to trust you, and that includes external publications that might want to feature you.

Then we have to consider the content we put out. All too often, people in financial services speak in a language the public doesn’t understand. Just as people notice when politicians speak in jargon, there is a tendency for people in financial services to speak about things most people, deep down, don’t understand or care enough about—i.e., using the word financial planning as opposed to explaining in simple terms what you can do to help the client and achieve the same results.

That is it from me. I will soon change my residency and need to deal with the legal and relocation specialists after writing this article—hopefully via email only, of course.


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