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Salesforce has announced an expansion to its Financial Services Cloud to help financial advisors build deeper relationships with clients and become more productive by automating relevant client information from disparate IT systems.
Two years in development, the Financial Services Cloud platform offers advisors profiles of clients, their households and extended networks. Modules include Client Life Goals which allow advisors to create collaborative financial plans for the client based on life goals such as budgeting for college or buying a vacation home and Wealth Home Page which automates administrative tasks so advisors can quickly scan their daily agendas, prioritize client tasks and track client opportunities.
Salesforce seems to believe that CRM (customer relationship management software) and artificial intelligence (AI) using APIs can overcome the silos that have bedeviled retail financial services firms for decades.
In its announcement, Salesforce said that “decades of mergers and acquisitions, evolving products that grew up in silos, multiple core systems across different lines of business and an explosion of data have created redundancy and a fractured view of the customer and their needs.”
To access the customer information in those silos, Salesforce is relying on a recent acquisition, MuleSoft, which uses APIs to extract customer information from disparate older systems and provide it to bank employees in an easily understood dashboard. Salesforce's commercial banking app provides relationship managers with a complete view of every customer's business and commercial accounts, and empowers them to identify and grow the most profitable relationships and streamline the onboarding of new clients. It also lets the commercial bankers make referrals to other parts of the bank, including wealth management and retail banking.
“For the first two years we focused on B2C now we are extending to B2B,” said said Rohit Mahna, senior vice president and general manager of Financial Services at Salesforce. "Customers wanted more repeatable action plans like passing a lead from the retail bank to the commercial bank.”
Since it started, Salesforce has done well with the financial services industry. It was being used by big players like Merrill Lynch, Goldman Sachs and Deutsch Bank, companies focused on ultra high net worth investors, like Bessemer, and four- and five-person shops across the country.
But, discovered Simon Mulcahy, it was getting the wealth management industry wrong.
Mulcahy, now the chief innovation officer, was running the company’s financial services groupwhen a conversation with one wealth manager made him realize that, as does occasionally happen with software companies, there was a huge gap between what Salesforce delivered and what wealth managers needed.
“I went back to Marc (Benioff) and the leadership team and they said to go deep. I ended up on the road." He visited more than 100 wealth management offices to learn more about what they needed.
“The industry is turning on its head,” Mulcahy said. “We had been helping them sell and they have a desperate need to do service-based selling. We have to help them change their operating and business model."
Millennials and female investors are being underserved by the current wealth management model, he added.
In the old model a client would bring a stack of paper to the financial advisor who would send it off to headquarters to get a financial plan in the form of a long paper-based document.
“The millennials are now 35 at the top end, entering the high earning time in their life and they need advice. The people who are getting advice are not getting it how they want. In other industries everyone is being retrained, and then you look at the staid experience of wealth management and it is like something out of Jeeves.”
“The industry model is a butler service,” Mulcahy said. “I am the advisor, tell me what you want and I will take care of everything. The relationship is binary — either give everything to the advisor and she does it all or do it yourself. You have all these people who aren’t being advised. The attitude is that it is too complicated for the client.”
The process is also product-centric. The advisor is going to sell the client some products and then have quarterly face-to-face reviews where the client faces more documentation than the average person can consume. But that’s probably not a big loss since the documents are out of date by then anyway.
Decades of complexity are slowing transformation, said Mahna.
“Complexity internally has created fragmented a view of the customer, they don’t have a holistic view of the customer.”
MuleSoft has built flows specific to financial services, which allows the Salesforce financial services platform to unlock all of a firm’s back office data sitting in core or policy administration servers, Mahna added.
Alyson Clarke, principal analyst for digital business strategy at Forrester Research, said Salesforce has been building this broad solution over several years. They started with the financial services cloud for financial planners, then did banking, then lending and small business.
“Now they have brought it all together,” she said, “with this great interface and they leveraged connectivity to services firms us like digital account opening. The new solution brings it all together across the organization —retail banking, lending, wealth management, commercial banking, SMB banking — to help you better serve customers in a customer-centric way.”
The problem for banks is not just that these are different businesses, they also use different technology for servicing the customer.
“If you have a customer who cuts across multiple lines of business, then the poor customer gets a very disjointed experience and the employees don’t know what is going on elsewhere. They can’t see that a wealth customer was talking to the firm about an SME loan. It brings the ability to integrate with a lot of existing systems and be able to connect the dots.”
“The financial services cloud is trying to make that employee’s job easier," Clarke added. “It will drive productivity and enable deeper and better conversations. If I can spend 10 minutes on administration and and 90 minutes on the conversation, and I can see other conversations you have had with other parts of the bank, it feels like I know you when I am talking to you. One benefit for the cloud is usability, the customer experience and how it makes the employee’s job a lot easier. It can pull together all the customer information in one spot.”
Next year, she added, Einstein will add artificial intelligence (AI) which will start to make the relationship management more deeply engaged and be able to suggest the next best action to an employee.
“I like its great usability. Salesforce is trying to understand the employee’s needs and it created an interface that allows you to customize and create a great experience for that person.”
The industry needs that help for employees, said Mulcahy, the innovation leader.
The advisors are in the mid to late 50s, they have a book of business and they really don’t want to sell any more.
“You are dealing with a business that starts with retirees and they end up dying. You have a high attrition rate which is not being addressed.” The advisor tends to have a relationship with the patriarch of a family, and when he dies, an average of 70 percent of client-heirs take their business somewhere else.
Wealth management firms face a challenge of how to stem the outflow of assets and retain the business.
Mulcahy’s research revealed that most investors — well over 50 percent — are dissatisfied. That’s something to worry about because the nation faces an enormous wealth transfer in the next five years — more than $2 trillion.
“The transfer is going on and the industry is not set up for it. It is still selling, not servicing.”
“You have to transform the experience of the advisor,” Mulcahy said. “Now it is so onerous. The advisor spends half a day preparing for a client meeting using 20-30 apps they have to swivel between. How do you make that easier?”
State Farm, for example, uses Salesforce to support agents in handling claims. When a claim is submitted, Salesforce provides a complete view of the customer and automatically creates an intelligent action plan that helps them prioritize their tasks. It also updates the customer by email or text message of the status and progress of their claim.
Among the partners supporting the launch are Athene Group and Envestnet | Yodlee for account aggregation, DocuSign and OneSpan for document management and electronic signatures, Informatica and MuleSoft to extract and integrate data from multiple systems, Orion for new billing capabilities and Advisor Software for portfolio rebalancing.
