Improve the Productivity of Relationship Managers and Financial Advisors with Business iQ

Every job has its mundane administrative tasks, and we all hate them. In the world of wealth management, relationship managers are pressured to serve as many existing customers and prospects as they can with the ultimate goal of increasing the assets under management (AUM)—one of the key metrics used to measure their productivity. Similarly, in the insurance industry, financial advisors are driven to maximize their time with clients. Administrative tasks are not only irritating, they also reduce a salesperson’s paycheck by cutting into his or her time with customers.

But organizational forces in both the wealth management and insurance industries are conspiring against their top revenue generators. According to Seismic, a staggering 65% of a relationship manager’s time is spent on business processes like account opening, accessing collaterals, and creating customized portfolio review with customers.

In the last few years, financial institutions and insurance companies have sought to free up their salespeople by investing in productivity tools. Mobile apps, in particular, hold the promise of speeding up processes like filling out client forms for clients, creating proposals, and building portfolios. They are also, in theory, a great way to deliver real-time market insights.

But mobile apps are only effective when relationship managers and advisors use them.

AppDynamics Business iQ allows organizations to measure the effectiveness of their mobile apps by providing a window into user behavior. In the example below, I show how a financial institution can instantly see how many relationship managers have clicked on a market insight to access AI-driven financial advice—a killer feature for increasing AUM. The dashboard, which I created in the AppDynamics demo environment, also shows how many relationship managers proceeded to “Add to Cart” and re-balanced their clients’ portfolios. We see that as relationship managers moved through the funnel, they increasingly abandoned the app. The overall conversion rate is just 5.62%. Slightly over one in twenty relationship managers used the application to send a proposal to their clients.

Below, I show how to a create conversion funnel using a built-in widget. It is as simple as going to the Add Widget tab and selecting Analytics and Funnel Analysis.

 You then select the business transaction that you’d like to include in the conversion funnel.

You can also quickly design a custom widget to highlight information such as the relationship managers who are generating the most new business.

Figure:  RMs with the highest new AUM

Or see at a glance the relationship managers who are sending the highest number of proposals. Moreover, you can break down the proposals by customer type. So you can see which customer type (Silver, Gold, Platinum, Diamond) the relationship managers are creating the proposals for. In the example below, you can see that relationship manager “aleftik” is sending all 960 proposals to only “Silver” tier customers. Relating the previous graph where the highest AUM is “aleftik” and he focuses all his effort to selling to the “Silver” tier customers, it appears that this is a desirable behaviour and strategy that the business should educate and share among other relationship managers.

Figure: RMs with the highest “Send Proposal” Transactions

Moving beyond the performance metrics of individual relationship managers and financial advisors, you can combine technical and performance metrics in order to see if updates to an application are negatively affecting sales performance.

You can see from the above conversion graph that version 2 of the code has significantly reduced the slowness (yellow and orange color within the bar) for Portfolios Summary page, positively impacting the conversion ratio from 5.53% to 14.52%

The business may also want to identify relationship managers who are not using the new productivity tool enough. Below is a way to create such a list of managers with the least number of page hits.

Figure: Number of page visit on “Market Insights” by RMs in ascending order

You can even put all of this together to have a customizable dashboard combining both technical and business performance metrics. At a glance you’re able to see the new AUM achieved by the wealth management group using the iPad application, transaction health of each key business process, top performing relationship managers and the products sold, as well as relationship managers who have yet to adopt the new application as a productivity tool.

With AppDynamics Business iQ, institutions do not need to wait for a month or a week to see business insights in relation to application performance and user behaviour. All the information is available at a glance in real time.

3 Reasons Financial Services Companies Need APM Right Now

Financial Services companies operate in a difficult environment. Many of their applications are absolutely vital to the proper workings of the global economy. They are one of the most heavily regulated industries in the world, and they are a constant target of hackers. Their systems need to be available, performant, and secure while generating the revenue sought by Wall Street and their shareholders.

In this article we’ll take a look at 3 factors that impact revenue and how APM is used to mitigate risk.

1. Customers Hate to Wait

Losing a customer is a bad thing no matter the circumstances. Losing a customer due to poor application performance and stability is preventable and should never happen! If you lose customers, you either need to win them back or attract new customers.

Fred Reichheld of Bain & Company reports that:

  • Over a five-year period businesses may lose as many as 1/2 of their customers
  • Acquiring a new customer can cost 6 to 7 times more than retaining an existing customer
  • Businesses who boosted customer retention rates by as little as 5% saw increases in their profits ranging from 5% to a whopping 95%

Based on this research, you should do everything in your power to retain your existing customers. Providing a great end user experience and level of service is what every customer expects.

APM software tracks every transaction flowing through an application, recognizes when there are problems and can even automatically fix the issue.

FS Transaction View

Understanding the components involved in each servicing each transaction is the first step in proper troubleshooting and problem resolution.

2. Customer Loyalty = Revenue Growth

On the flipside, better performance means more customer loyalty and, as a result, revenue gains. The Net Promoter methodology, developed by Satmetrix in cooperation with Bain & Company and Fred Reichheld, is a standard way to measure customer satisfaction. Satmetrix developed the Net Promoter methodology, which is an indexed measure of customer loyalty. In their Net Promoter whitepaper, Satmetrix discovered a direct correlation between high customer loyalty scores and the rate of revenue growth for those companies. The paper showed that the higher the customer loyalty score a company achieved, the higher their rate of revenue growth over a 5-year period.

With applications playing a dominant role as the most common interaction between company and customer, it is imperative that customers have a great experience every time they use your application. Slow transactions, errors, and unavailable platforms leave customers dissatisfied and will reduce your loyalty score. Over time, this will have a significant impact on revenue.

So if we accept the premise that performance should be top-of-mind for anyone with a critical banking or FS application, what do we do next? How do we improve our application management strategy to prevent loss of revenue and improve customer loyalty? The answer: by taking on a transaction-based approach to application performance management.

APM software tracks the performance of all transactions, dynamically baselines the normal performance, and alerts when transactions deviate from their normal behavior. In this manner you’re able to identify performance problems as they are beginning instead of waiting until customers are frustrated and abandoning you applications.

FS Business Transaction List

List of business transactions classified by their level of deviation from normal performance.

3. Transactions = Money

Transactions are the lifeblood of banking. From making an online payment or converting currency to buying or selling stock, just about everything a bank does involves transactions. Furthermore, a significant portion of banks’ revenue comes from transaction fees for activities ranging from ATM withdrawals to currency conversion and credit card usage. For these fee-based transactions, the faster you can ring the cash register (response time of business transactions), the more money you will make and the better likelihood that your customer will come back to you for their next transaction.

With this in mind, it is imperative that IT organizations take a user-centric, or rather, transaction-centric approach to managing application performance.

APM software provides context that enables you to understand the business impact of failed and/or slow transactions. The data gathered by APM software can be used to focus on improving functionality that is used most often or responsible for the most revenue.

FS Prioritization

Having various data perspectives allows application support and development teams to prioritize what needs to be updated in the next release.

If you aren’t using an APM tool yet, or if your APM tool isn’t providing the value that it should be, then you need to take a free trial of AppDynamics and see what you and your customers have been missing.

The Digital Enterprise – Problems and Solutions

According to a recent article featured in Wall Street and Technology, Financial Services (FS) companies have a problem. The article explains that FS companies built more datacenter capacity than they needed when profits were up and demand was rising. Now that profits are lower and demand has not risen as expected the data centers are partially empty and very costly to operate.

FS companies are starting to outsource their IT infrastructure and this brings a new problem to light…

“It will take a decade to complete the move to a digital enterprise, especially in financial services, because of the complexity of software and existing IT architecture. “Legacy data and applications are hard to move” to a third party, Bishop says, adding that a single application may touch and interact with numerous other applications. Removing one system from a datacenter may disrupt the entire ecosystem.”

Serious Problems

The article calls out a significant problem that FS companies are facing now and will be for the next decade but doesn’t mention a solution.

The problem is that you can’t just pick up an application and move it without impacting other applications. Based upon my experience working with FS applications I see multiple related problems:

  1. Disruption of other applications
  2. Baselining performance and availability before the move
  3. Ensuring performance and availability after the move

All of these problems increase risk and the chance that users will be impacted.

Solutions

1. Disruption of other applications – The solution to this problem is easy in theory and traditionally difficult in practice. The theory is that you need to understand all of the external interactions with application you want to move.

One solution is to use ADDM (Application Discovery and Dependency Mapping) tools that scan your infrastructure looking for application components and the various communications to and from them. This method works okay (I have used it in the past) but typically requires a lot of manual data manipulation after the fact to improve the accuracy of the discovered information.

ADDM1

ADDM product view of application dependencies.

Another solution is to use an APM (Application Performance Management) tool to gather the information from within the running application. The right APM tool will automatically see all application instances (even in a dynamically scaled environment) as well as all of the communications into and out of the monitored application.

Distributed Application View

APM visualization of an application and it’s components with remote service calls.

Remote Services 1

APM tool list of remote application calls with response times, throughput and errors.

 

A combination of these two types of tools would provide the ultimate in accurate and easy to consume information (APM strength) along with flexibility to cover all of the one off custom application processes that might not be supported by an APM tool (ADDM strength).

2. Baselining performance and availability before the move – It’s critically important to understand the performance characteristics of your application before you move. This will provide the baseline required for comparison sake after you make the move. The last thing you want to do is degrade application performance and user satisfaction by moving an application. The solution here is leveraging the APM tool referenced in solution #1. This is a core strength of APM and should be leveraged from multiple perspectives:

  1. Overall application throughput, response times, and availability
  2. Individual business transaction throughput and response times
  3. External dependency throughput and response times
  4. Application error rate and type
Application overview and baseline

Application overview with baseline information.

transactions and baselines

Business transaction overview and baseline information.

3. Ensuring performance and availability after the move – Now that your application has moved to an outsourcer it’s more important than ever to understand performance and availability. Invariably your application performance will degrade and the finger pointing between you and your outsourcer will begin. That is, unless you are using an APM tool to monitor your application. The whole point of APM tools is to end finger pointing and to reduce mean time to restore service (MTRS) as much as possible. By using APM after the application move you will provide the highest level of service to your customers as possible.

Compare Releases

Comparison of two application releases. Granular comparison to understand before and after states. – Key Performance Indicators

Compare releases 2

Comparison of two application releases. Granular comparison to understand before and after states. – Load, Response Time, Errors

If you’re considering or in the process of transitioning to a digital enterprise you should seriously consider using APM to solve a multitude of problems. You can click here to sign up for a free trial of AppDynamics and get started today.