CX governance – controlling the controllables
CX has become the differentiator
For many asset managers, market forces have eliminated their ability to differentiate themselves based on either product performance or pricing; and they should be seeking through CX governance to be controlling the controllables.
Unless they have a well-known brand, Client Experience (CX) has become the differentiating factor for them to both attract and retain their clients’ confidence.
In addition, CX is commercially important because it impacts their profitability twice – protecting revenue, and managing costs. Because of this, it is an area where firms are investing and developing their capabilities.
~75% of firms lack sufficient CX governance and it is causing problems
However, Accomplish’s recent industry-wide research into client experience discovered that as an industry, many asset managers are not getting CX right . These firms are experiencing twice as many indicators of an unfavourable CX than of a favourable one.
The root cause is that ~75% of firms lack a CX strategy and sufficient CX governance to control the operational complexity of serving clients with different needs.
We will address CX strategy in our next blog. This one focuses on CX governance.
What is CX governance?
In its simplest form, CX governance comprises the routine processes, controls and accountabilities that asset managers need to deliver a favourable experience to their clients reliably and repeatedly.
Accomplish’s view is that this involves the following disciplines:
- Aligning your prospects’ and clients’ expectations with the experience you have deliberately designed for them.
- Assessing non-standard requests before agreeing to them.
- Monitoring the ongoing quality of each component part of your CX and their aggregate effect on client satisfaction.
- Continuously improving the experience you provide to your clients.
- Ensuring your CX stays up-to-date as market needs evolve.
The overall purpose for CX governance is controlling the controllables.
How can asset managers achieve this?
To ensure their CX governance is effective, firms should embed their service levels and the key performance indicators of their desired client experience into digital workflow. They should then monitor their performance regularly through dashboards and institute sufficient internal oversight to stimulate them into taking any appropriate action.
For example, are firms effectively identifying operational ‘red flags’ at the RFP stage, how are they tracking the efficiency of their contracting and onboarding processes, and how well is their operating model coping with reporting or billing customisations?
Unless asset managers tether themselves to a deliberate CX strategy (segment, customise, or standardise), they will tend towards ‘customisation-as-standard’. This is because, in a governance-poor environment and in the absence of any alternative guidance, client-facing staff will defer to uncontrolled customisations for clients.
It is not an ideal outcome because while ‘always saying yes’ is an acceptable CX strategy, when it is ungoverned it increases the variability of service standards operational staff need to meet. In turn, this increases complexity. This should be a ‘red flag’ for COOs as it is expensive, operationally risky and, as a result, it is an unsustainable way of maintaining client satisfaction.
It does not need to be this way and, indeed, Accomplish has helped some of the industry’s biggest and most complex asset managers create systematic solutions that have both met their client needs and reduced their internal complexities.
Without a regular internal view of how it has felt to be a client over the latest period, firms can also find themselves reliant for external feedback on issues, complaints or an (often) annual service review or client survey. These rely too much on the goodwill of clients, can lack sufficient detail, and can be too little too late.
In terms of next steps, Accomplish is entering into dialogue with technology providers to explore options for incorporating CX governance into industry workflow packages. We look forward to keeping you up-to-speed.