The surge in digital and mobile investing is just beginning

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May 28, 2021

By Marianne Ahlmann, Senior Manager, Communications

By every measure, digital adoption and mobile uptake among Schwab clients over the past year has been lights out. A record 1.1 billion mobile and web logins occurred in 2020 on Schwab platforms, which combined with TDA logins surpassed 1.5 billion, and mobile trades quadrupled last year. So far this year, a whopping 95 percent of new accounts were opened digitally, and mobile app usage has increased by 54 percent.

Part of the digital acceleration has clearly been driven by changes people have had to make because of the Covid-19 pandemic. Zack Gipson, Senior Vice President of Digital Investor Solutions, also noted that use of digital solutions has been broad across Schwab’s client base, and he expects it will continue to accelerate in a post-pandemic world. Among new Schwab clients, 86 percent say what they want most from a financial services firm is an easy-to-use interface.

Zack quote

“We’ve seen a real shift in terms of clients using digital tools, not just for learning and exploring but for transactions too. Some clients engage differently depending on the combination of ‘human touch + technology’ they prefer, but to a large degree the comfort level with our digital experiences is agnostic to age, wealth, and complexity.

Zack Gipson, Senior Vice President, Digital Investor Solutions, Schwab

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"In addition to driving significant new products and services for clients, digital is also modernizing the more routine parts of the investing experience – like entering account information or guiding a client to the right customer support team – and freeing up humans for higher-value engagements like planning,” says Gipson.

Research suggests that the latest increase in use of digital is not just a short-term behavioral work-around. A recent Schwab study found that 87 percent of consumers plan to continue their increased use of digital tools after the pandemic ends.

So where do we go from here?

What’s Next

Gipson says the bar will be raised even higher on what users expect from digital interactions with their financial services firm. Consumers expect the digital investing experience to be as easy as other parts of their lives, like one-click shopping or ordering groceries online. Gipson shares, “We use the term ‘liquid expectations’. Clients’ expectations of their next digital experience is informed by their previous ones; we are not just being compared to traditional competitors, but rather the entire spectrum of digitally native firms.”

The goal, in Schwab’s view, is how to combine the best of human interactions and technology to provide a highly personalized, integrated, and frictionless user experience.

Gipson predicts clients will rapidly notice differences in how their financial services providers serve them, and points to three specific areas:

  • Technology will make investing a more human experience – If a client is addressing an issue on their mobile phone and then calls into a service line, they shouldn’t have to re-explain their situation, account information, and who they are. “I don’t have to re-introduce myself every time I come home to my wife and kids. In the highly personal business of helping people manage their money, clients shouldn’t have to re-introduce themselves to their financial services provider either,” says Gipson. One of the most common prompts for clients to reach out is when they’re dealing with emotional life events or challenging financial situations, so requiring them to re-introduce themselves can be particularly frustrating and impersonal. Technology can connect client data points so that no matter where, when, or how a client interacts they should be recognized, greeted, and served around their unique needs.
  • People will be able to manage their finances similarly to how they use fitness trackers to stay in shape – Financial planning is too commonly a static, transaction-based exercise, but the decisions that have to be made are complex, emotional, and evolving. Education and literacy are critical, but historically providers have offered a large amount of information into a channel such as a website, and let customers go find what they need. Providers are now working on how to make insights personal, digestible and actionable through digital channels. That could come in the form of pointing out specifics about a client’s situation such as where they may be over-spending. Digital “nudges” can be embedded into tools so clients can form small productive habits that help them reach their goals, not unlike how fitness trackers keep users focused on fitness goals through encouraging more steps or squeezing in another workout. Gipson points out that there’s a fine line because too much nudging can make clients overly focused on day-to-day markets rather than their long-term goals. The aim is to create engagement and ownership at the right level and pace.
  • The investing experience will include free personalization – Right now, digital tools are more of a destination that clients come to versus something that reaches out and engages with them proactively. Yet, 48 percent of investors would be willing to pay more for personalized financial products and services, according to the CFA Institute. “From how we welcome you in, to what we show you, to the way we interact with you moving forward – it should fit with your unique situation,” says Gipson. To that end, Schwab is continuously finding new ways to use data science to personalize and improve the client experience. That could look like providing real-time customer support to a client by phone because we know the issue they were trying to resolve online, or digitally serving up educational content tailored to a client’s specific needs.

Across each of these areas, a critical part of the equation is finding the right balance between technology and human support. “Humans are better at empathy, emotion and addressing highly complex situations,” says Gipson. “We want to give them more time to do that while also utilizing technology for what it does well – equipping our professionals with the right information at the right time to serve clients, enabling scale to efficiently and effectively serve our growing client base, and automating self-service of financial activities.”