blog
Can Institutional Web Sites Multitask?
By Sean
In kasina's most recently released study of institutional Web sites, "Meeting Institutional Investors' Needs Online," it became clear that firms are decidedly in one of two camps with regard to the Web's role in supporting their institutional businesses:
- Prospecting: Supporting business development efforts by conveying information to potential investors and consultants about the firm's investment philosophy, products, and portfolio management expertise
- Servicing: Supporting the needs of existing clients through online access to market values, updated holdings, transactional capabilities, performance reporting, and proprietary research
Strangely, in the nearly dozen or so conversations that I have had with clients in the last few weeks about this issue, almost nobody has been so bold as to suggest that the Web could satisfy both objectives. Such limited assessments of the Web's potential in the institutional channel are rooted in investors' past behaviors.
Yes, today, most institutional investors are probably less comfortable with the Web than the average 21-year old. Many of them probably prefer paper statements to electronic ones, phone calls to e-mails, handshakes to clicking "I Agree." The institutional business will always be high-touch, but, sooner than most firms think, phone chats will yield to browser clicks, commentary will be downloaded to iPods, and PMs will blog as I do here.
It's been exciting to hear that a number of our institutional clients are now refocusing on the Web. As they reassess its role in supporting their businesses, I would advocate for a longer-term approach that considers both the needs of today's investors as well as those of the next generation of institutional investors, one that does not necessarily relegate the Web to playing only one of two roles.
Sean,
You say that you "advocate for a longer-term approach that considers both the needs of today's investors as well as those of the next generation of institutional investors."
What does that approach look like? What will the next generation of institutional investors seek from the Internet?
That approach involves meeting the demands of today's investors by disseminating product, service, and account-specific information via the Web, while, at the same time, monitoring, and integrating, forthcoming Web technologies that:
- Increase the level of collaboration between investors and managers via online communication and messaging tools
- Deliver personalized Web site experiences based on a dynamic understanding of investors'information and service needs
-Enhance the interactivity of the Web site through streaming media, Podcasts, and other like-technologies
In the future, investors will turn to the Web to conduct transactions, communicate with RMs, and react to PM commentary. The Web will facilitate collaboration, not just consumption, and online experiences will increasingly becoming three-dimensional instead of one-, or sometimes two-, dimensional as they are today.
Today's average 25-year old uses the Web to:
-Communicate ideas (blogs)
- Develop connections (social networks)
- Access content (Napster, BitTorrent)
- Syndicate/aggregate content (RSS)
All of these technologies, or technologies like them, will come into play soon in the institutional channel. It may not be next year, but it will very likely be within the two to three years.