Engineering: leader della Digital Transformation

Digital Finance

Five questions to...
Antonio Carpinato

Our Area Director "Wealth Management" as well as Engineering Group Sales Director explains the changes taking place in the advisory world, which is increasingly focused on achieving sustainable goals.

1.

WHAT ARE THE MAIN CHANGES THAT ARE AFFECTING THE ADVISORY WORLD?

The pandemic marked a major shift towards a "new normal" that involved distancing and ongoing restrictions that changed the environment of an industry traditionally based on close physical relationships between advisors and customers. That forced people to turn to digital technologies as a solution to ensure continuity for businesses and all the typical day-to-day activities by changing habits and behaviour. This has confronted intermediaries with the need for a technological overhaul to offer remote services and meet the demands of younger, smarter customers. As a result, advisors are being called upon to rethink their role within the industry as well as their communication methods and relationships with customers, which are inevitably mediated by new digital tools.

Secondly, sustainability aspects must be considered in their entirety. Today, intermediaries need to collect ESG data in order to comply with regulatory disclosure obligations (SFDR) and take into account the ESG preferences of investors, who have become even more sensitive to sustainability aspects as a result of the pandemic. These are emerging as an element of product customisation.

In addition, we are witnessing a change in the aspects underlying the development of investment strategies. From a product-based approach there is a shift towards an objectives-based approach and an advisory model geared towards financial planning by objectives; see the examples of Banca Sella and Banca Mediolanum.
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2.

WHAT ARE THE IMPACTS OF THESE DEVELOPEMENT ON THE CONSULTING WORLD?

The shift towards an objectives-based advisory model implies the need to consider the customer's more traditional investment objectives but also various other objectives, such as pension and insurance objectives. The advisory world must adopt a holistic approach that takes into account the customer's financial, insurance and lending needs.

On the technological side, however, industry players are seeking to implement services to meet the growing needs of a remote service model. Among these, the most relevant are without doubt platforms for remote customer relationship management that open the door to new supply channels and platforms for self-investing (Robo Advisor). The market is booming for these platforms, which represent a revenue-enhancing opportunity for intermediaries because of their ability to provide a low-cost, personalised advisory service. This helps to broaden the customer base to include more consumer-oriented individuals with smaller assets who, until recently, were excluded from advisory services provided through traditional channels due to an unfavourable cost-benefit ratio for the intermediary. We note that the model currently in vogue isn't the true self but the hybrid model where it is still possible to liaise with the advisor within the platform in case of need.

Finally, in a context where advisory services are adapting to take into consideration all customer objectives and products are increasingly customised, data is assuming a central role in the definition of investment strategies. And when we talk about data, we refer not only to ESG data but also all data related to the customer's characteristics financially. But it is not limited to that. Using technology today, the scope of data available on the customer today can be expanded by understanding their preferences, life goals, spending habits and other habits, their reaction to particular market cycles through observation of their past behaviour, etc. It is only by analysing and comprehensively grasping the customer's image that it is possible to offer customised advisory services to guide people in the construction of investment strategies truly suited to their characteristics.

3.

HOW DOES ENGINEERING SUPPORT THE TRANSFORMATION OF ADVISORY SERVICES? WHAT SOLUTIONS DO YOU OFFER TO SUPPORT INDUSTRY PLAYERS IN DEVELOPING NEW SUPPLY CHANNELS?

Thanks to Deus Technology, a fintech enabler specialising in wealth management recently acquired by the Group, we can count on a suite of products, services and expertise to support wealth and risk management specialists intended to accelerate the transformation of advisory services.

In particular, we have a solution that covers all steps related to the onboarding, profiling and customer relationship management process.

In addition, we also have a proprietary Robo Advisor that is available in the Robo for Advisor version, thus being used for the advisor's operations, or in the B2B2C Robo-Advisory version designed to enable self-investing models that are perfectly integrated with the institution's existing digital channels and can be used for multi-line wealth management or advisory services.

Through a simple and straightforward customer journey combined with an engaging and interactive user experience, also supported by gamification tools and educational content, the investment process is made accessible even to customers who are less familiar with the digital world.

It is a set of flexible solutions as they can be applicable to any type of financial instrument and aimed at any intermediary, banks, SGRs, family offices and insurance.
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4.

THE INDUSTRY'S FOCUS ON ENVIRONMENTAL, ECONOMIC AND SOCIAL SUSTAINABILITY IS GROWING AND IS SUSTAINED BY THE MOMENTUM GENERATED BY THE PANDEMIC AND REGULATORY REPORTING REQUIREMENTS. HOW DOES ENGINEERING SUPPORT INDUSTRY PLAYERS IN RESPONDING TO THIS PHENOMENON, IN DEVELOPING A NEW AWARENESS AROUND SUSTAINABILITY ISSUES AND IN OPERATING ON THE MARKET AS A DRIVER OF VALUES?

To support industry players in meeting the requirements of relevant regulations and to take advantage of the ESG opportunity to offer their customers a high-standard service that can "proactively ride" the green wave of sustainability, which the media is increasingly focusing in the day-to -day, we have developed a platform dedicated to the collection, management and processing of data on the sustainability of investment products.

In making the transition to ESG-conscious consulting, the choice of the best ESG data provider(s) is just one aspect to be taken into account.

The technological aspect must also be taken into account. In fact, ESG data needs to be processed by adopting algorithms and analysis techniques that are suitable and consistent with its nature (structured in n components with a typical data structure that is not completely organic and hierarchical and with the need for both aggregations at the portfolio level and detailed analytical reporting) to fit alongside more traditional ones.

The tools integrated into our ESG platform enable the intermediary to provide advice that takes into account, in addition to traditional risk factors, environmental and social risks that are more understandable to the customer, opening up a new way of communicating investment services.

Today more than ever,customers need to be emotionally engaged with what really captivates, interests and motivates the person beyond the financial return.

Customers needs to be wooed through communications that leverage their value system, and that allow them to re-direct their attention from the expectation of a possible economic return towards the satisfaction of their emotional need such as, for example, the opportunity to contribute to something they believe in.

Customisation must therefore be based on a profound understanding of the unique needs of each customer and the orchestration of tailor-made experiences through digital channels, adapted to reflect a human dimension and our platforms allow us to fulfil this objective in full.

5.

THE ADVISORY WORLD IS MOVING TOWARDS AN OBJECTIVES-BASED APPROACH. DO YOU THINK THIS IS AN END POINT OR A STARTING POINT FOR FURTHER EVOLVING THE SECTOR?

In Engineering, we believe that adopting an objectives-based approach to consulting can be a starting point in evolving the sector and an opportunity to strengthen the bank/customer relationship and the customer's understanding of financial aspects.

Certainly, the concept of "objective" helps customers give substance to the purpose of their investments also by involving them more in interactions with financial advisors within the investment strategy construction process. The investment objective also allows the construction of simple and intuitive user experiences that support the adoption of self (where the customer invests independently) or hybrid (where the customer invests in self mode but can rely on advisor support when necessary) approaches to advice, further facilitating the circulation of technologies such as Robo Advisor. This approach also helps to personalise communication with the customer by adopting a model where the focus is no longer on market trends – which are difficult to understand by outsiders –but on the likelihood of achieving set targets.

In this new approach, the figure of advisor is broadened. In the initial phase of the relationship with the customer, the advisor is called upon to be gauge the customer's financial needs and aspirations for the construction of a long-term investment plan. The advisor can then support in the process of investigating the customer's characteristics through modern technologies that help to aggregate data on financial products with data on the customer (age, profession, current accounts, income, income and expenditure, credit, investment, insurance, pension needs, etc.) giving a clear and complete picture.

The objectives-oriented approach is the first step in shifting the advisory world towards a paradigm geared towards meeting all people's needs. In Engineering we are working on building platforms that, starting from a 360-degree snapshot of the person, help to provide services that satisfy the complex set of needs that characterise the person, ensuring they are met as they arise. Each day we renew our commitment to support industry players in shifting consulting services in this direction.
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Antonio Carpinato

With more than 30 years of experience in the IT industry, Antonio has held various roles in Delivery, Account, Consulting, Sale and Management, up to his current role as Area Director "Wealth Management" as well as Engineering Group Sales Director with the strategic charge of fast-tracking clients to the new paradigms of Advisory and RoboAdvisory.

Contact us

marketing@eng.it
Tel. (+39) 06-87591