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New behavioral analytics capabilities

New behavioral analytics capabilities

Science-based decision-making

As the time series behind the Behavioral Benchmark lengthens, asset managers are graduating from just measuring and comparing their effects on client behavior to also exploiting new behavioral analytics capabilities.

For example, they now know the effects they need to create to stand out from the average firm, they can see where they need to align themselves with regional differences in client behavior, and they can take advantage of new knowledge about industry norms.

This previously unavailable business intelligence is enabling them to make science-based choices about where on the client journey they want to improve or differentiate.

Example commercial implications

To give an idea of the potential for commercial gain (or lost opportunity), using 2021 data, within EMEA we found an almost 220% difference in institutional sales conversion rates.

Looking globally, we found that, on average, asset managers in the Americas converted twice as many mature sales opportunities compared to those in EMEA. At the other end of the scale, we found that relationship depth (as measured by mandates per client) was tightly grouped with only 5% separating the Americas, EMEA, and Apac.

We believe findings of these magnitudes are unignorable.

New behavioral analytics capabilities

To unearth insights like these, we have built a suite of analytic tools.

For example, we help asset managers set targets by knowing the different ballparks other firms operate in and how they compare. We achieve this via dispersion analysis that highlights where on the client journey firms’ effects on client behavior are either widely dispersed or tightly grouped. As it turns out, at a high level, the greatest differences are in the marketing and sales stages.

As mentioned earlier, we are also enabling firms to optimise the alignment between their internal structures and regional differences in client behavior. We are doing this with a tool that identifies the behaviors that vary the most across different regions. To help asset managers take advantage of this information, we are working with them to develop testable explanations and response plans.

A third capability we have built is creating value out of the opposite situation: client behaviors that appear constant across geographic regions. This data-driven identification of industry-wide norms is strengthening some previously anecdotal evidence and busting some myths. These are commercially important because, on the sales side, you can incorporate constants as safe assumptions in your distribution strategy. On the service side, they imply standards you need to meet to be competitive across regions (i.e. ‘hygiene factors’), and they indicate functions you might want to standardise and centralise.

Planned capabilities

As we look forward to the continued lengthening of the Behavioral Benchmark’s time series, we are laying the groundwork for two additional analytics capabilities.

Forecasts – if you know where you have come from, you can work out where you’re going. So, as well as measuring and comparing, we also want to give asset managers the ability to predict the effect they have on their clients’ behavior. We have built a prototype forecasting capability and early tests indicate that we may be able to forecast with between 86% and 95% accuracy. We intend to test this for another year before going live.

Causal relationships – from a behavioral perspective, your firm is providing all its products and services because you want to create a cause-and-effect relationship between your actions and those of your clients. We intend to measure those relationships. As a result, starting in the US advisory market, by 2023, we expect to have measured the statistical relationships between leading behavioral indicators that you can stimulate in your clients and the ones needed to realise your strategic objectives.

Take the first step on your behavioral benchmarking journey now by downloading a brochure.

The client behavior element of your distribution strategy

When you embark on your behavioral benchmarking journey the first stage of your onboarding will involve Accomplish helping you develop the client behavior element of your distribution strategy:

  1. What are your strategic objectives?

  2. What client behaviors will you stimulate to achieve them?

  3. And how will you measure success?

As you start to see the data coming in about how you compare against your peers, you will be able to drive your strategy by setting targets and refining your underlying marketing, sales, and service strategies to change the effects you are having on your clients.

We look forward to helping you make the most of these new behavioral analytics capabilities and supporting you at all stages of the journey.

Adam Grainger

Adam Grainger

A 20-year veteran of the investment industry. Client experience. Behavioral analytics. Data science.

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