New high-tech offerings-including wireless technology, virtual communication and online communities-are changing the dynamics of how fund companies communicate with customers.
"Transparency and technology are going to fundamentally and irrevocably transform the wealth management industry," commented A. Michael Lipper, president and chief executive officer at Lipper Advisory Services, speaking at Wilmington Trust's "10-Year Capital Markets Forecast" meeting in New York last week.
"Financial services is always the lead user of technology," said Charles Berman, senior vice president at Fidelity Labs while discussing technology trends at The National Investment Company Service Association 25th Anniversary Annual Conference & Expo in Miami last month.
It's also a good idea to watch what the younger generation around the world is using in terms of technology and what Internet websites they frequent, and follow that lead, Berman noted.
The online database Wiki has enormous growth opportunities, Berman said. Wiki allows users to freely create and edit web page content. It supports hyperlinks and allows individuals to create new pages and crosslinks between internal pages. Two popular features are the Wikipedia and Wiktionary.
"Wiki is fundamentally changing how human knowledge is being created and shared," Berman aid. A trend like this is of great importance, he added.
Another interesting technology application is mashups, which integrates information from one or more sources to create an application, an example being Google Earth. The concept introduces an entirely new way to write applications, Berman said.
"If cleverly done, it takes very advanced business systems and intertwines them together," he said.
Additionally, programmers have created a number of three-dimensional virtual reality environments, similar to those of video games, where a number of users can collaborate in real time. As for people thinking that the demographics of the applications are slated to young people, the median age is actually 35 years old, he said.
One might ask what videos and virtual reality environments have to do with corporations, Berman said, but they are actually very closely related. User-generated content at a company's website, for instance, could create an electronic community, he said.
The increase of mobile technologies is also changing the industry and the way clients interact with companies, said Joseph Ferra, chief wireless officer at Fidelity eBusiness.
Through cell phones and mobile devices, "people are able to connect to the Internet anytime, anywhere," Ferra said.
The U.S. is lagging in the area globally as well. Asia, South Korea and Japan are way ahead of the U.S. in terms of what they use devices to do, Ferra noted. In Asia, some residents have the key to their apartment building as a barcode on their cell phone, he said.
"The key is using mobility in a wireless way to complement the web," Ferra said.
Clients have stated that they would like to have the capability to access account information and navigate Fidelity.com on their mobile devices, not just on their home computer, Ferra said. Currently, however, they are unable to do so because Internet portals cannot recognize login passwords and user identification from a numeric keyboard on a cell phone rather than a computer keyboard.
"We are lacking services, applications and even user confidence," Ferra said.
To circumvent the login problem, perhaps web developers could create a program that would allow mobile device or cell phone users to enter websites without having to type in their passwords but with another piece of information, Ferra said. For instance, clients could take a picture, program it into their cell phone's memory, send the picture to Fidelity.com and use that as their login.
Voice recognition is another solution, Ferra said. Eventually, however, mobile providers will come up with the technology that will make cellular phones fully compatible with the Internet so that users can key in their username and password, he said.
When implementing new technology, firms must have a large commitment to it, Berman said. There also needs to be a culture of innovation, as it is essential to create an environment where the next great idea will emerge, he said.
When developing new technology, companies must center on knowing their end user and providing appropriate content, Ferra stressed. It is best to focus on how the client benefits from the new feature and whether it provides the best value, he said. First determine what you want to deliver before figuring out how to deliver it, he said.
But once you move to the "how," it needs to be user-friendly, Ferra said. "Technology needs to be intuitive, simple and easy to use," he said.
(c) 2007 Money Management Executive and SourceMedia, Inc. All Rights Reserved.