The retail strategy underpinning TIAA’s digital marketplace

At TIAA, the digital-first imperative sweeping asset management convinced the financial services giant to acquire robo advisor MyVest last year and begin examining how it serves and reaches clients.

There's agreement all clients are already interacting and consuming products differently as a result of digital innovations like mobile apps, says Scott Blandford, TIAA's chief digital officer.

Inside the firm, he says, notions about distribution and service are being molded around the idea of digital as a storefront, enhanced with in-house data measurements to constantly tailor offerings and improve.

TIAA’s tech transition is being guided by a rethink of how it sells products, its chief digital officer says.
An employee arranges products at the Apple Inc. Williamsburg store in the Brooklyn borough of New York, U.S., on Friday, May 20, 2017. Apple Chief Executive Officer Tim Cook said in May that the company planned to invest at least $1 billion to back advanced manufacturing companies in the U.S. and help create jobs in the industry. Photographer: Mark Kauzlarich/Bloomberg

Blandford spoke with Money Management Executive about the innovation efforts that TIAA has undertaken, and how distribution for asset managers will change.

An edited transcript of the conversation follows.

How is TIAA meeting the challenge of a digital era for asset management?
Increasingly as we've delivered more online, we've been thinking about what does post digital transformation for us look like. And more accurately said, what's next? So we've been very focused on what's the right way to organize ourselves so that we don't just finish a bunch of digital projects, but that we really become a digital company.

In a lot of ways, that's what TIAA is doing. Instead of saying there's one fintech in the center, we've been asking, 'How do we create multiple fintechs in our company and organize in a way that they're building something great for customers, and that it all makes sense together?'

So we've adopted the concept of our digital footprint, whether its web, mobile or social, is like a storefront, where customers can buy things but also get service. And our store has departments and those departments have aisles.

It may sound overly simplistic but it's really worked great — I'm the manager of the big store, but we've got a department that's focused on helping customers with retirement, a department that's focused on helping them with everyday banking, and in the everyday banking department there's an aisle that's got a leader that's worried about bill pay.

It's more mangeable.
Yes, with that sort of structure, you've got a small team of people that are working every day making their part of the store as good as it can be. One thing they can do, for example, is watch our measures. We've built some great real-time measurements, so they can see when our customers are getting lost in my aisle. When we know that they are, we can then ask, what do we need to change — content, links, functionality — through SMS or email.

In some ways it's not just building new projects and launching them and making sure we're getting the big things right for customers. It's also the everyday care of customers when they're in our store.

How does that focused effort then play into the big idea that digital will increase or broaden distribution?
The way we look at it is, we're here to help our customers get what they need.

How additional growth and distribution through digital intersects is what I'm talking about with our stores concept, that if you get those stores right, you're putting the things on the shelves the right way for the people that need them at the right time. So that instead of flooding customers with everything they could possibly buy from us all the time, we're looking at the data, understanding what they need and when they need it so that we're helping them.

We see what's working, what isn't. I don't have a lot of hard data on what I'm about to say, but we've talked to enough customers and done enough research that we think that, in today's world, every digital device in your house is competing for your attention. Between the smart phone and the television and the computer; at work and at home, it's all competing for customers' attention. The best way to be respectful of our customers when they're living in this world where they're overwhelmed with people trying to get their attention is to reach out for things that are really going to be important to them and could really help them. And that's across all of our channels, so not just the web.

We have a very integrated approach here at TIAA, so the tools our financial advisors use is the same system that our call center uses, and that's wired into the same system that web, mobile, outbound and outreach uses. It's all kept together, and what we're trying to do is drive it so we're focusing our messaging on what customers really need at the times they need it.

How then do you balance digital development for a tech-focused future that doesn't take away from the characteristics that the company is built on?
We think the future is high tech plus high touch. We actually need to do both. The same customer that one day will be completely satisfied and interested in working entirely digital, will three days later, or next week, or next month may have an issue, or a question, where they want to talk to somebody, and that could be on the phone in or in person.

So the best thing we can do to grow and also help all our customers is be good at both. And we feel like we have great strengths there. We've got nearly a 100- year legacy of in person assistance with customers on a range of different goals they have, while we've put a big focus here on becoming great digitally. We want our customers to be able to go between.

Our feeling is if we make digital really great, they'll want to come there as we make the in person experience really great too. We want to meet the customers where they are with what they need. It's more work for us, but we think it's the right answer.

Generally, what are the innovation needs at TIAA and other providers?
There's innovation that's responding to changes in the world, such as the growth of conversational user interfaces, whether it's text messaging, chat bots or voice devices. Those are changes in the world that firms like ours and others are responding to. Then there are internal innovations where we're changing the world, like the socially responsible investing that's part of the TIAA personal portfolio.

The greatest need for innovation is on the external challenges, where the world is changing and everyone wants to respond and take advantage of those changes to help serve more customers and in more ways. Channels are a big area of focus for us and other firms, for instance. We were the first retirement provider to offer an app for the Apple watch.

There's a need for innovation in our internal operations too. We look at that challenge not only from the perspective of increasing efficiency, but the customer service element as well. The more automation and digital we drive into our operation, that's improved quality for customers, that's improved cycle time for customers.

Also, in companies like ours there is need to continue to innovate in the core products, our core strengths, to keep leveraging what we've always been good at.

Can you talk about TIAA's acquisition of MyVest and how that was integrated? Have there been any learnings from buying a Silicon Valley firm?
We view it as the lens for our managed accounts business and our TI personal portfolio. It's allowed us to get a connection to the Silicon Valley fintech ecosystem. Going the other way, we've got resources at TIAA that we've been able to bring there. There's been a great deal of learning in both directions.

One of the special sauce items inside the MyVest system is it's all household-oriented and customer-oriented. It allows us to help customers manage their portfolios for the customers, based on the customers' goals, not just based on the account structure they have. They built an incredibly sophisticated engine that's in such harmony with how we approach the world at TIAA.It's all about the customers, doing what's right for them with a holistic financial understanding. That's whether they're working with an advisor or not.

Do you see asset management transforming into a technology-first industry? Take BlackRock's new approach, for example.
The short answer is yes. The way we look at it is that the world has changed and continues to change, and a lot of technology has been consumerized. People are comfortable downloading apps to their phone and troubleshooting the basics. They set up their home networks, they have WiFi thermostats. I read an article not that long ago from a big fast food company that said, 'We're a technology company that serves fast food.'

So I think a lot of firms and a lot of industries are making that transition to the notion that technology is just a part of what we do. I think companies all need to be transforming themselves, but for us, the digital transformation that we're in now is a lot about standing up these capabilities and we've done a lot of that.

Going forward it's about empowering our people, to continue to advance every aisle, every department in our store, in small ways and in big ways. And we want to be a digital company that has a lot of people working on it all the time.

It shows up in the customer experience. Firms that are living it versus just saying it are doing like what we're doing. We've got some capabilities launching on mobile first because we pay attention to where our customers are and what they're doing. If they're on mobile, we need to be leading there.

I'm just wondering when will the industry get to a point where everything is produced for digital consumption first.
I don't have in my mind a date or a time, but I think it's been a steady progression that way. If you think about it, as customers get more comfortable with digital tools, and as the digital realm extends its reach to where it's everywhere — it's in social, it's on mobile, it's in wearables and the internet of things, it's integrated with brick-and-mortar providers — a lot of the user patterns become more cemented and certain ways for people to do things will emerge.

Getting back to our firm, our approach is high tech and high touch, sowe're going to be there for customers where they are, but also know that there are some things and some times where it's just better to talk to somebody. And we want to be there for them, too.

Is the industry ready as a whole to shift to serving more people than it has already? The premise being that a firm can't solely be a custodian bank anymore, that a firm can't solely be an asset manager anymore.
I think that's next. Again, it's about what the customer needs. And as they change, we want to be thinking ahead and not just sort of catching up afterwards.

And I think there are certainly, you know, providers that are doing that and we're one. But I think it's mixed.

For TIAA, we're excited about it and we're making great progress. Our retirement digital properties are top rated with the firms that rate them, and our customers are satisfied. We're getting, you know, the best customer satisfaction scores we've ever gotten digitally.

I think it's because we've taken the approach that digital is not about digital, it's about the customers and where they are, and making every aisle and every department in our store great, every day. And understanding what new things we think customers will need and making sure we're building them quick and having them there when they're ready.

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