DALBAR e-Delivery Benchmarks Study Highlights Challenges of Digitization for Financial Services Providers
As the financial services world continues down the road of digitization, one of the most challenging transitions that has arisen is in the realm of client or investor communications. Specifically, shifting from paper-based statements to an electronic format, known as e-Delivery, is proving to be an uphill journey for many financial service firms.
From account updates in the form of quarterly statements to transaction confirmations, tax documents, client correspondence and even annual reports and prospectuses, for individuals with investments, the “paper trail” can be extensive. For financial services firms, however, it can also be expensive.
The latest e-Delivery Benchmarks Study by DALBAR, released in May 2018, provides an interesting view of the landscape of e-Delivery adoption across financial services providers in the US, as well as insights into costs, strategies to improve adoption and client experience associated with e-Delivery of investor documentation.
Without question, there are numerous benefits to clients for moving to e-Delivery, especially in a world where digital device usage is now an essential part of many people’s lives. For example, storage and retrieval of information is much easier than with paper statements. There is also considerably less waste and impact to the environment by going paperless.
That said, the latest e-Delivery report found that adoption rates by clients varied between 31% for mutual fund accounts and 58% for retirement accounts; brokerage accounts saw an e-Delivery adoption rate of 49%. It begs the question, given the benefits to investors and service providers alike, why aren’t these adoption rates higher?
The path to an answer lies first in establishing and understanding benchmarks. Of course, knowing why rates aren’t higher is one thing, but getting adoption rates higher is another.
An important step to improvement of adoption rates begins with measurement. These e-Delivery benchmarks provide financial service organizations with the ability to gauge their own progress in this area. Financial service providers, who are known to be highly competitive, definitely need to quickly understand deficiencies or advantages relative to peer firms is crucial. Having benchmarks to refer to enables quick, data-driven action to take place.
A second reason why knowing the benchmarks on adoption rates is important is because they prompt a discussion on how these rates can improve.
As complement to the e-Delivery Benchmarks Study, DALBAR also organized an e-Delivery Roundtable, an event in which industry leaders gathered to discuss and compare practices to improve adoption rates. Even though the latest benchmark adoption rates are modest, evidence from these roundtable discussions shows that firms can reach rates as high as 80% with a combination of tactics that can address specific obstacles investors may have to utilizing this communication channel.
For financial service firms who can improve e-Delivery adoption rates, the rewards are immediately realizable since digital document delivery is far less expensive than having to do so by mail. DALBAR’s latest e-Delivery Benchmarks Study is an effective tool that enables firms interested in providing superior service and keeping costs low to not only gauge their progress relative to peers, but also to see what tends to be working and where there could be areas for improvement.
For more information on the e-Delivery Benchmarks Study, including how to purchase the contact firstname.lastname@example.org.