05.12.2015
By Terry Flanagan

Digital Transformation Continues

Digital transformation is enabling financial institutions to be more nimble in rolling out new products and services, as well as create a unique customer experience.

Capital Group, which manages $1.15 trillion, has changed the way it distributes and disseminates information about its flagship American Funds, which include equity and bond mutual funds.

“Digital transformation has fundamentally shifted our business model,” Stephen Jenvey, principal architect at Capital Group, told Markets Media. “We have been historically and continue to distribute funds via advisors, and we would service those accounts through a specific share class. We’re now shifting to a fee based model, where advisors are now not only providing advice, but they are also looking to service the customer as well.”

American Funds leverages all types of media. “Omni-channel is a buzzword as is cross-channel,” said Jenvey. “We were a very publishing, print-centric organization with workflows that were driven from this kind of work, and are transitioning into much more of a real-time message [while] still obeying all of the rules that we have because we’re a heavily regulated industry around compliance, reviews, and filing.”

Capital Group’s approach was to implement the Adobe digital marketing cloud, which provides a multi-channel experience. “We used that in conjunction with other vendors to build a platform that is omni-channel to enable omni-channel content distribution,” said Jenvey.

Digital transformation “is the application of technology and cultural shifts to make businesses more agile, transparent and customer-focused,” said Stephane Dubois, founder and chief executive of market data provider Xignite. “It’s about businesses coming in with a new operating model, a new service set, and/or a new attitude towards customer relationships.”

Financial services has not been on the leading edge of digital transformation for a number of reasons, according to Dubois. The front-end, where companies interface with retail or institutional clients, is characterized by manual personal service (driven by financial advisors, traders, etc.). On the back-end, there is a huge amount of very expensive, “Titanic-like” technology that creates a massive cost structure and little ability to react.

“In truth today, finance involves many manual processes,” said Dubois. “This does not scale well, but profitability and size have made many firms complacent to this kind of infrastructure.”

Financial services companies are between “a rock and a hard place,” Dubois added. “The regulators have been beating on their heads with a very large stick for years, and now an army of startups from Silicon Valley to New York, Boston and Singapore are lighting dozens of fires under their bottoms—threatening their actual existence.”

Jenvey, who is responsible for technology strategy in Capital Group’s distribution business, joined the company four years ago after spending 11 years at Fidelity Investments, most recently as vice president of new business development at Fidelity.com.

Digital transformation revolves around agility. This means ensuring that there is appropriate change management to support the transformation.

“There’s the transformation to IT and there’s the transformation that happens around digital business, beginning with looking at digital as more as a business,” Jenvey said. “Historically, IT and Digital were one unit within capital group, and one element of the change management was to empower the business to self-manage and self-publish.”

Feature image via iStock

Related articles

  1. Daily Email Feature

    Digital Assets on the Buy Side

    With Thejas Nalval, Co-Founder and Chief Investment Officer, Parataxis Capital

  2. From The Markets

    Investors Back EU CSRD

    Corporate Sustainability Reporting Directive elevates sustainability information to same level as financial.

  3. Essentia analyses data to create behavorial “nudges” for fund managers' investment decisions.

  4. Corporate Bond Trading on the Rise

    With Adam Conn, Head of Trading, Baillie Gifford

  5. Partnership will develop a suite of U.S.-listed, physically backed ETFs.