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We need to talk about customer service in fund administration


By Dan Kramer, Jaid CEO

Any fund administrator worth their salt will tell you providing a high level of customer service is their top priority. But while most firms undoubtedly mean this — and work hard to achieve it — research suggests there’s a gulf between how well the industry thinks it’s doing and actual performance. 


Firms overestimate client satisfaction by as much as 14%

More to the point, when investors choose to end a relationship with a firm, a subpar customer experience is to blame 76% of the time. 

With investors more engaged, emboldened, and, willing to switch providers than ever before, this is simply not good enough. 

If they’re to thrive in an increasingly competitive environment, fund administrators need to overhaul the customer experience and bring it in line with investors’ expectations. And using AI can help them do just that, turning a long-standing achilles’ heel into a competitive advantage.

The changing face of client services

So, what sort of customer experience do investors want in 2022?

Where, in the past, the client-fund administrator relationship was fairly linear — the investor got onboarded, their account got managed, and, if they were no longer happy with the service, they ended things — this is no longer the case. 

More and more, today’s investors are moving away from a purely transactional approach. Instead, they want to establish deep, collaborative partnerships with the firms they work with.

Deloitte report singles out seven key drivers of a stand-out customer experience:

  1. Timely, accurate, accessible reporting
  2. A tailor-made, personal approach
  3. Clear communication
  4. Attentiveness, that is responding to requests quickly and being proactive
  5. Long-termism. In other words, taking the time to build trust instead of going in for the hard sell
  6. In-depth knowledge of the investor’s requirements, business model, and end-investors
  7. Smooth operational interactions. For example, fast and accurate transfers

Unfortunately, many fund administrators are falling short on all seven of these key metrics.

And, in our experience, this is down to two interrelated factors: the way the funds industry has changed, and the manner in which fund administrators have responded to those changes.

A tangled web

Regulation, client demand, and the vagaries of the markets have created an extremely complex landscape.

It’s not uncommon for an institutional investor based in, say, North America to have exposure to European stocks in an Asian-domiciled fund. For this reason, there are all sorts of practicalities and interconnected regulatory implications — payment issues and tax treatment are a case in point — to contend with. 

At the same time, shrinking margins and the ensuing drive towards greater efficiency have given rise to internal organization models that, objectively, are the opposite of efficient, with specific departments often given additional responsibilities seemingly at random.

The upshot is that customer service can be hard to navigate for investors and fund administrators alike. 

Investors may simply not know what questions to ask in the first place in order to get the answers they want.

But even if they do ask the right questions, routing them to the right person or department isn’t always straightforward. During the course of our work, we’ve come across instances where, to figure out who to direct a query to, fund administrators’ customer service representatives have to consult a 50,000-line spreadsheet.

Put simply, instead of resolving client issues, customer service representatives are spending the bulk of their time reading client communications and trying to find out who might be able to help.

It can take several attempts just to find the right person to resolve the issue, which can be hugely damaging to the client-fund administrator relationship.

More importantly, the harder it is for both sides — customers and customer representatives — to navigate the process, the more opportunities there are for things to go wrong.

Communication breakdown

Over the past few years, there’s been a growing push for digital transformation in the funds industry.

According to the Alpha Digital Readiness Survey, investment in digital technologies is a high priority for 79% of executives. And for 51%, the main focus is on improving the client experience.

Seeing as the funds industry has historically lagged behind other financial services sectors when it comes to digital adoption — and given the sizable gap between client expectations and the actual quality of service — this increase in investment is welcome.

The problem is that, instead of addressing the root of the problem — the complexity of internal operating models — fund administrators are asking clients to change their behavior, including by communicating in ways that don’t work for them.

Unsurprisingly, investment in technology doesn’t seem to be achieving the desired results. Only 23% of respondents in Alpha’s Digital Readiness Survey reported that their clients were satisfied with their digital capabilities.

For 77%, the client experience is still proving to be an impossible nut to crack.

Streamlining the customer experience, with AI

As it happens, improving customer service through digitalization doesn’t have to mean forcing clients to do things your way. With an AI-powered platform like Jaid, it’s possible to boost both efficiency and customer satisfaction.

Because AI can parse unstructured communications and organize them into actionable data in seconds, it makes customer service simpler and faster for everyone.

Investors can communicate using their preferred channel, whether that’s an email, a Slack message, a fax, or some other method. And the platform will read and understand the message, and prepare it for your customer service process, so they can address the issue as quickly as possible.

Jaid’s clients, for instance, report 50% increases in productivity and 82% reductions in the time it takes to resolve issues.

Crucially, AI becomes more effective at identifying problems and directing them to the right person over time, which means your customer satisfaction scores will increase the more you use it.

But AI is great for employee morale too.

Because the platform handles all the manual work, it frees them up to focus on the more satisfying parts of the job–solving client issues. At Jaid, we’ve seen our clients’ employee engagement scores go up by 24%.

Make customer service your superpower

In 2022, customer service is a key differentiator in any industry, but especially so in fund administration.

As Ross Ellis, VP and managing director of the SEI Knowledge Partnership observes:

“If you look at Amazon, they have retail transparency, they have a huge focus on customer care, and that influences each and every one of us in our daily lives…It’s becoming very personalized and it has changed…expectations. If I’m investing in a fund, I’m no longer satisfied waiting a month to understand what’s in my portfolio and seeing various attribution characteristics. I also want to know what fund products other investors like me are buying, to introduce some degree of predictability to the client experience.”

But fund administrators with high customer satisfaction scores don’t only stand out from the competition.

More significantly, they’re also more likely to retain customers even when their investments underperform.

With so much at stake, particularly given the current state of the world economy, fund administrators can no longer afford to get it wrong. 

You can’t have business excellence without customer service excellence.

And an AI platform like Jaid can help fund administrators make sure they surprise and delight customers with every interaction.

Ready to get started?

Let us show you how we can help.