Models That Change the Game

The challenge is to acquire new wealth management customers in large numbers and serve them effectively at a lower cost. To overcome this, three service models have been introduced: In Person, Digital, and Hybrid.

• ‘In Person’ Model: Wealth advisors identify customers, create financial plans, decide investment allocation, and onboard them.
• ‘Digital’ Model: Also known as Robo-advisory.
• ‘Hybrid’ Model: A combination of “In Person” and “Digital”

Customers are looking for different levels of support for financial planning, portfolio construction, portfolio tracking, and rebalancing. Wealth Management firms have typically responded with cost-efficient models categorized below.

Going Beyond “Business as Usual”

Besides these core areas, there are a few critical adjacent areas – customer reporting, on-demand advice, tax, and estate planning. Wealth management firms are now modularizing where customers can choose the services they want. Initial digital services were limited to the customer experience layer. New services are fully digital through process re-design and automation of manual handoffs. The next wave of customer experience transformation will go beyond customer profiling, customer onboarding, and reporting.

Investment Planning, Investment Analysis, And Portfolio Management Will Become More Sophisticated in The Hybrid Model

While the hybrid model already exists, the Do-It-Yourself tools are often rudimentary. The sophisticated tools are only available in the advisor-guided model. The new customer experience transformation will provide these tools to the customers with built-in investment guardrails and a spectrum of advisor oversight.

• Mapping financial goals to investment options: Brokerage firms and retail banks offer some tools for defining financial goals and sophisticated tools for investment options. The connection between these two is often lacking. The new customer experience will strengthen this connection and enable much more sophisticated self-planning by the mass market. The next wave of sophistication will build on the current foundational tools.
• Guided portfolio construction: In the current hybrid model, mass-market customers get pre-built portfolios with a few reviews by advisors each year. The next wave of customer experience can enhance the portfolio options themselves. It is conceivable to have many more options for stocks and bonds and present a what-if analysis beyond the limited advisor review. It will open more value-added services from the advisors for complex portfolios of alternate assets, commodities, and real estate at higher fees.

AUM-based pricing is not flexible enough for this à la carte service model. Neither are clients willing to pay significantly higher fees for bundled services. Wealth management firms should realize that there is no such thing as a perfect pricing model and should focus on smart pricing, which is clear, comprehensible, and reasonable.

The main aim must be to match propositions to the client’s needs and charge a fair price for the same to build a strong client-customer relationship in the long run. Hence, clear cost attribution and transparent pricing are needed in the new model. This will also help firms adjust to dynamic commercial environments.

The Big Dig took 15 years and cost the people of Boston approximately $22 billion. All in all, 80 miles of tunnels were excavated under the city so that the main throughway could run under (rather than over) the port side of the city. As a result, the area is much nicer, and traffic has improved. But what about a city with no traffic at all? Impossible! No city on earth could pull that off. Unless… what if the city wasn’t – strictly speaking – on earth?

In Seoul, South Korea, the metaverse has begun to take hold as a new way for people to connect, interact, and experience the city – without standing in lines, waiting for buses, or even leaving home. What Seoul is building is other-worldly in its potential. And it looks a lot like the future.

A city that’s ready for the metaverse

South Koreans are famously devoted to gaming and virtual reality (VR), as seen through their televised gaming competitions and VR fun parks, where visitors participate in virtual reality battles, escape rooms and other games. The metaverse has also been the site of events and concerts. The K-Pop group BTS recently held a virtual concert in the metaverse, attended by fans from across the world. It’s no surprise that Seoul is aiming to become the first city in the world to deploy metaverse technology on a city-wide scale.

What might Seoul’s metaverse city look like?

The city’s five-year plan is taking aim at several areas, notably business, education, tourism and public services. A business services portal is already online, providing startups a place to reach the public. Eventually, the project will provide virtual coworking spaces that allow citizens to work remotely as if in a real office. The goal is not to create a virtual copy of the real world, but to build something even better, using the new capabilities the metaverse affords. Seoul smart city policy bureau CIO Jong-Soo Park gives one example: “We hope to one day have an AI-based public servant working in the metaverse office in close collaboration with others for public services.”

On the education front, a portal has linked 34 separate campus towns to provide coaching, collaboration and networking opportunities. Future courses may be led and attended entirely in the metaverse. Virtual tourism allow locals and international visitors to explore major sites, present and long gone. The tour will soon include Donuimun Gate – which last stood in 1915. Further down the road, authorities are working on the infrastructure to support the annual Seoul Lantern Festival, as well as museum exhibits. This year the Seoul government will open a virtual Mayor’s Office, in which public servants – as avatars – will provide consultations and everyday services with no lines, no crowds, and accessible to more people than ever before.

The road from physical city to metaverse city

For cities considering joining the metaverse, one aspect of Seoul’s project is worth noting – it’s compartmentalized. For cities that are not looking for a Seoul-sized commitment (700 companies are helping the city government carry out their metaverse plans), a piece-by-piece plan might be more attainable. New Jersey is using metaverse technology for one purpose – enabling citizens to visualize developments in the planning stage. New Zealand is using digital twins to help people see the expected effects of climate change. Plans such as these won’t revolutionize city life, but they’re a confident step in the right direction. And as Koreans say, “Rome wasn’t built in one morning.”

For urban planners, a midway point to the metaverse

Another way to look at the road to the metaverse is from the technological side. I’ve mentioned VR above; the second big step along the way is the digital twin. A digital twin is a representation of a physical asset or system that allows for real-time monitoring and analysis of the asset or system. Digital twins enable users to interact with these objects and systems as if they were in the real world. This can include everything from virtual cars and buildings to virtual machines and even entire cities. Alone, digital twins don’t make a metaverse. In the New Zealand example above, digital twins were built to imitate changes to our climate. But the people observing the twin are… well, people. With digital twins, you have real people standing outside a digital system, looking in – a midpoint along the way to the metaverse, where everything and everyone are represented digitally.

Digital twins will play a crucial role in helping to create a fully immersive and interactive virtual world. In the meantime, they’re already revolutionizing the way we interact with and experience the virtual world. They’re used to simulate and test changes to the physical world, allowing for more efficient and effective decision-making in the design and operation of complex systems. On a more human level, they’re also a powerful persuasion tool – demonstrating the potential of digital worlds in a simple, easy-to-understand way.

Building a city in the metaverse? First, build trust.

A second steppingstone towards a successful application of the metaverse is trust; trust in the virtual data that is needed to fully digitalize our own identities. The interest is already there – according to a recent survey by the Capgemini Research Institute, a majority of those surveyed believe immersive experiences would be “impactful and valuable” in the areas of education, healthcare and shopping, as well as other uses. That being said, for the metaverse to truly reflect the physical world, key items like personal identify, ownership and payments, users must trust the provider of these virtual services. Only once government departments have established virtual trust with their citizens, will they be receptive to metaverse applications.

So… is the metaverse the future of urban planning?

I work with digital technologies, including digital twins and metaverse. Whether at work or among friends, I’m asked two questions more than the rest combined: “is the metaverse all just hype,” and “what’s the point?” Seoul’s approach helps answer both questions. There’s a hailstorm of metaverse hype out there, but it’s easily distinguishable from the real work that cities like Seoul are undertaking. Seoul’s ambitions are concrete and appear achievable. However, today the metaverse is still in its very early stages. Governments that want to build their city in the metaverse and spearhead the implementation of this technology for the benefit of their citizens, need to invest in smart city concepts and work with the industry to improve public trust in data. Investments should be aimed at creating better digital twins with as many connected data sources as possible. There is also a need to invest in educating citizens on the use of different technologies used to access the metaverse. (Education includes VR parks, public art – anything that familiarizes people with the new tech.) Once citizens trust and feel comfortable with using VR, AR, AI and other technologies, the doors to the metaverse are ready to open.

40 years ago today, as I write this, the internet was born. January 1st, 1983. A decade and a half later, those who saw its potential were still a rare sight in public. Most technologies are invented to solve a clear problem, and we as a species are pretty good at understanding those. But there’s another type of innovation that lifts humanity up a step, delivering us someplace new. These are nearly impossible to wrap our heads around until the change is well underway. Is the metaverse such a creature? Let’s watch Seoul carefully, and be ready for whatever’s coming next.

Read more about real-life use cases for metaverse tech in TechnoVision for Public Sector, our yearly look at leading technological applications in the public sector space. For more information on metaverse and digital twin technologies, contact me at gunnar.menzel@capgemini.com or have a look at our Metaverse Lab.

Who would have access to BOI?

FinCEN’s proposal limits access to BOI to federal agencies engaged in national security, intelligence, or law enforcement activities; state, local, and tribal law enforcement agencies with court authorization; financial institutions with CDD requirements and regulators supervising them; foreign law enforcement agencies, prosecutors, judges, and certain others. (Treasury officials will have a unique degree of access to BOI.)

Under the proposed regulation, financial institutions will have direct access to FinCEN’s database. However, their access will be limited – FinCEN may only disclose BOI to financial institutions that request such information for purposes of complying with their CDD obligations (i.e., certain banks, broker dealers, futures commissions merchants and mutual funds, but not money services businesses). They will be required to submit a specific reporting company’s identifying information and, in turn, will receive an electronic transcript with that entity’s BOI. It’s noteworthy that FinCEN’s restrictions on who can access the sensitive and confidential BOI stand in contrast to the approaches of various countries outside the U.S., including the United Kingdom, where public access is permitted.

How will BOI need to be protected?

The Access Rule also specifies how recipients of the BOI will need to protect against unauthorized disclosure, including storing the information in a secure system to which only authorized personnel have access and only for authorized purposes. Audit requirements will apply as will requirements to certify compliance with the statute and proposed regulations. FinCEN also will require authorized recipients to maintain key information about specific BOI searches or requests. The Access NPRM also provides that unauthorized disclosure of BOI is unlawful. To protect against abuse, federal agency users will be required to submit “brief justifications” for their searches and explain how those searches further a “qualifying activity.”

FinCEN still has much to do to complete the UBO regime, including finalizing the proposed Access Rule, revising its CDD rules, developing the BOSS database and the BOI Report, and crafting substantive rules to verify BOI. Nevertheless, financial institutions should begin now to consider policies and procedures that will address their anticipated new UBO requirements, including when and how they will request written customer consent for access to BOI.

¹This “Access Rule” follows the final rule that FinCEN issued last September requiring most legal entities created in or registered to do business in the U.S. to report information about their beneficial owners to FinCEN.

We live in a digital world – one that runs on 1s and 0s – a binary system that has, over the past 50 years, made an extraordinary difference to so many aspects of our lives, our work, and our society. But, despite Moore’s Law, this system does have inherent limits. For example, our inability to model interesting chemical reactions or complex financial risk, indicates that there are some economically important computations that classical computers struggle with. However, these so-called intractable problems may, in time, be solvable for a greater benefit – with the application of quantum.  

Why quantum?

Well, it has been around for a number of years, so this is not a new discovery, but as with so many technologies, it takes time to find its relevance in the working everyday world, rather than residing in the labs of academic research.  

Certainly, harnessing the immense power of quantum could feel like a distant fantasy – the stuff of science fiction. But as head of the Quantum Lab at Capgemini, I believe that we should make what might seem like the magic of quantum both understandable (as far as quantum is explainable) but also, more importantly, demonstrate its relevance to our world – both society and work.

Coming out of a post-Covid world, with its many restrictions, I believe now is the time to take an inventive, creative, and explorative approach to how the power of quantum could be used in the future. This is letting our minds embrace possibilities rather than “definitives”. Our Lab’s ambition is to explore the breadth of what is possible.

Accelerating quantum advantage

From our work in the Lab, we see that achieving a quantum advantage is getting ever closer, certainly closer than many of us thought a few years ago. Investment is a considerable part of this speedup – with venture capital being sucked into the development of key hardware, but there’s more to it than that: the funding of specific use case algorithms and also the use in conjunction with AI and machine learning. And there are also the near-term steps of quantum inspired – such as in life sciences

Quantum often gets conflated with quantum computing – obviously they are not one and the same, but let’s look at some of the most promising applications of quantum computing, which I think help to demonstrate the practical application – maybe not tomorrow, but definitely in the foreseeable future.

What if complex problems were solved in days, not years? Could faster scientific discoveries lead to medical breakthroughs?

One of the major future applications of quantum computing is the accurate simulation of molecules and their interactions, which could have transformational potential in life sciences R&D. Simulating whole drug molecules is a few years away, as too is accurate simulation of interactions for human biology, which requires improvements in the scale, quality, and speed of quantum hardware. But research shows we can start with modelling fragments of molecules in silico, and, looking ahead, one day it may be possible to access molecular properties such as solubility, surface area, and molecular weight.  

The current iterative process of drug discovery – design, synthesize, test, and analyze – repeated until the desired outcome is reached takes a lot of time. We’re in the early days, but pharma pilots are investigating how quantum can optimize molecular subsets to find the potential sets of drug compounds that have the most potency and efficacy against certain pathological conditions.

Or help us manage unforeseen risks?

The Financial Services sector is one that is, by default, dominated by risk, uncertainty, and the need to respond quickly to changing situations in the environment. Will the promised, albeit modest, speedups of quantum Monte Carlo one day offset quantum hardware challenges in speed, scale, and quality? Current hardware is not powerful enough to run practical applications, but progress is rapid, and the financial industry is determined to reach quantum advantage. Besides, minor quantum improvements could lead to significant gains in the massive financial markets, and the need for real-time solutions make quantum computing an exciting opportunity. 

Being curious

This is a just a taste of what is ahead of us in the field of quantum computing and what we – at Capgemini’s Quantum Lab – are working on, with commercial organizations, consortia and pan-government research initiatives.  Our team of experts is translating the use cases with the most potential into quantum algorithms that can run on today’s hardware, to really see what is actually possible and how the world might look like in the future.

If my words have not inspired you as to the world of possibilities of quantum, maybe our video will!

The pandemic and economic tensions around the world have been taxing, especially on businesses relying on the import and export of goods across international borders. This has thrown up a number of challenges for the logistics industry. On a mission to create a better customer experience and even smoother operations, Hellmann Worldwide Logistics joined forces with Capgemini’s Invent and Applied Innovation Exchange (AIE) teams in Munich and Amazon Web Services (AWS). 

Creating an agile customer experience 

Congested ports, limited capacities, enormous production backlogs: the pandemic, ongoing political tensions, and growing economic uncertainty around the world haven’t been easy on anyone – and the global logistics industry has been caught in the middle.  

Companies have faced an array of production and shipping delays, all too often with little to no visibility of their shipment’s progress and limited flexibility. For Hellmann Worldwide Logistics, creating a more transparent customer experience was the incentive for partnering with Capgemini Invent, AIE Munich, and AWS for a three-day Rapid Innovation Discover workshop. 

Innovation in progress 

As we started our engagement with Hellman, the first challenge was to identify the main pain points in the current customer experience and write the problem statement.  

Ahead of day one, our team from Capgemini Invent did a deep dive into the logistics industry as well as the problem context. 

“For innovation to thrive successfully, it’s crucial to identify and define a clear problem statement.” 

Dominik Schindler, Senior Manager Corporate Experience, Capgemini Invent Germany 

This formed the basis for the workshop and included diving into relevant startup and technology trends in the logistics industry. On top of that, Capgemini Invent surveyed relevant members of the Hellmann team to gain more insight into the workings and vision for their operations.  

Our research revealed a clear need for more transparency, autonomy, and flexibility for Hellmann’s clients to help them organize their internal organizations more reliably and not feel left in the dark. We needed to find a way to help them take back control and allow them to take matters into their own hands. 

Working with the problem 

After presenting our research findings and creative methodologies, including one from our innovation partner AWS, day one of the workshop kicked off with an ideation session to brainstorm potential solutions to Hellmann’s problem statement. Depending on the problem we’re looking to address, we can leverage different creative techniques. In this case, we decided to start with something called the crazy eight method.  

This means every workshop participant is tasked to come up with eight potential ideas. At this stage, it’s not so much about the quality of the idea but more about the quantity. It’s about not giving it too much thought and just firing away to see what sticks. In this session, we ended up with 121 different ideas between four groups. 

Then it was time to develop the most promising ideas. Here, our team at the AIE Munich decided to go with an exercise called the idea tower, where each participant chooses to work on one idea from the pool. They then continue to build it out based on relevant factors from the problem statement. Each person has three minutes to develop the idea further, then they hand their notes on to the next person, who continues to build on the idea. This helped narrow the field down to 16 potential solutions.  

Following a democratic process, the groups agreed on three key ideas that addressed Hellmann’s problem best, but only one came out on top. This idea centered around a new customer experience that allows Hellmann’s customers to actively manage their shipments. 

From idea to prototype 

On day two of the workshop, the teams followed AWS’s “Working Backwards” method to take the idea from concept to tangible prototype. Under this approach, teams are divided into smaller groups to draft a press release and FAQs, and to prototype visuals for the chosen idea.  

Day three was spent iterating on the three Working Backwards artifacts as well as creating a business model canvas, an initial solution architecture, and a first business case. These, in addition to the prototype, were tested with several Hellmann clients to get feedback in real time.  

As the dynamics across the globe continue to change and evolve, finding new ways to grow your enterprise and adapt to customer needs is vital for long-term survival. Keeping on top of innovation trends in your industry and harnessing the power of an innovation ecosystem, like the Capgemini AIE, can help secure business success.

Visit Capgemini’s AIE to learn more. 

Digital transformation that puts you in the driver’s seat – Harnessing the true potential of data-driven ADM

Building application development and maintenance (ADM) services that can fully utilize data is the first step in a company’s data modernization journey. The systems that are core to the delivery of data-enabled ADM contain a wealth of data and insights to accelerate the delivery of services. For example, the data residing in an ITSM tool can be extracted and analyzed to understand the nature of incidents that typically make up the bulk of an application maintenance team’s workload. This can help in identifying the highest-impact incidents to target automated resolution or enhance monitoring to drive down incident volumes.

Additionally, analyzing ticket data for recurring incidents targets root-cause analysis initiatives on the highest-impact problems. Extending this data analysis can also facilitate an AI-enabled capability to identify not just the root cause – but also the resolution that eliminates these incidents from even occurring.

The combination of automating the resolution of one batch of high-frequency incidents, and pre-emptively eliminating another batch of recurring incidents can bring a material reduction in application support effort.

The resources freed up through this process can then be applied to further the data modernization journey. Assessing the “as-is” and then modernizing data landscapes to eliminate data silos and redundancies enables the further exploitation of data. This newly standardized and sanitized data provides fresh insights into further transformation opportunities – particularly on the business side – that enhance the value of data to drive real change.

Capgemini’s ADMnext^Data – Bringing data to light to help you successfully navigate your digital transformation journey

Capgemini’s ADMnext^Data integrates all the assets and capabilities of our market-leading ADM services with our unique insights and data capabilities. These combined capabilities enable us to help guide you on your data modernization journey as part of a long-term relationship.

Firstly, our Enterprise Automation Fabric (EAF) offering specifically focuses on incorporating data into the heart of the ADM services we offer. EAF is the foundational automation suite that underpins the delivery of services across technology and business process operations. It works with your ITSM to extract incident data and identify the highest value transformation and automation initiatives. It also possesses the AIOps capabilities to automate the resolution of incidents and root-cause-analysis processes.

As support requirements fall and resources are freed thanks to EAF, Capgemini can then leverage assets such as our eAPMand Advantage-ROI tools to help you better understand your current maturity and implement the highest value transformation opportunities across your data estate. Value can be identified both from your modernization of data landscapes (for example, through migration to cloud or application rationalization), as well as business process transformation efforts.

Data-enabled digital transformation provides companies with an unprecedented opportunity to leverage data that separates themselves from their competition. Capgemini’s ADMnext^Data gives you the tools and expertise to guide on your data-enabled digital transformation journey.

To start your drive on the path to data-enabled digital transformation as a Data Master, drop me a line and visit us here to learn more.

As part of our new series of blogs and vlogs focused on startups and their role as a catalyst for sustainable innovation, Capgemini Ventures is exploring the benefits of opening up the conversation. But, of course, there’s a lot to take onboard during this journey, and the first consideration is the introduction of new ways of working.

For many organizations, there’s a notion that innovation from startups can be positioned at the periphery and not the heart of the bigger picture. In our opinion, however, this represents a gap in corporate strategy that needs to be plugged. Startups are no longer shiny objects but are now embedding themselves firmly into business value propositions.

However, collaborating successfully with startups is not simply a change of mindset. Because collaboration through an open ecosystem speeds up time to market, enterprises may need to explore new approaches to their old challenges – rapidly adapting their organization, processes, systems, and even business models to respond with agility. But this isn’t necessarily as daunting as it sounds.

Many organizations are beginning to realize the value in blurring their boundaries and including startups as part of their value proposition. Salesforce, for example, has augmented part of their business to embed startups. They’ve created AppExchange, where startups and independent software vendors (ISVs) can sell their services and grow. AppExchange is the leading enterprise cloud marketplace to help extend Salesforce – and customers can find proven apps and experts to quickly solve their business challenges.

Dominique Gillies, Regional Vice-President, Strategic ISV Partnerships, EMEA, Salesforce, explains: “This is the fastest way to bring innovation to our customers and ensure their success in the long run.”

Bringing startups into an effective ecosystem

If the benefits of bringing startups into an effective ecosystem are clear, and other organizations are starting to reap the rewards, then the next question is: how? Because even though startups bring in disruptive innovations and exciting new technologies, they also bring in niche markets and high-risk associations. So, how do you overcome the challenges?

Here are a few ways to help organizations create an open ecosystem that fosters powerful collaborations and partnerships with startups – while avoiding many of the associated growing pains:

1.    Establish internal sponsorship and strategic buy-in

The first thing you must do is work out your mission and define your unique objectives because it’s vital to have strategic clarity on the business need. 

Next, it’s important to map out the stakeholders across leadership and the operational teams who will execute the strategic ambition – and take the newly defined objectives to them. These can not only be used to achieve the buy-in that’s required, but also act as a tool to learn more about the business and its needs. When working with a partner like Capgemini, you can then bring the objectives to us to help sharpen the proposition, too.

It should all be part of an ongoing process that happens over time, as opposed to a one-off strategic play. This will help to foster strong collaborations that nurture long-term associations with startup ecosystems.

2.    Scout the right startup

New startups appear all the time and spotting the right one can be a challenge. You should therefore have a pre-defined and time-bound process that provides decision-making support to your business before any startup engagement begins.

The methodology that’s employed should help your organization understand the strengths, synergies, and risks of engaging with a particular startup – and should ultimately be tied to your overarching strategic ambition.

Once a suitable startup has been identified, and the due diligence carried out, you can then work with the startup closely to jointly develop a value proposition that will deliver the right outcomes before any actual work begins. This can be followed throughout the entire engagement to ensure everything remains on track.

3.    Test the water

Along with gathering anecdotal evidence and assessment outcomes, it’s important to run proof of concept (POC) testing to demonstrate feasibility, while continually interrogating the value proposition that’s been defined.

This will enable you to outline the constraints and parameters that will ultimately help to validate how the startup’s solution infuses innovative solutions and compliments your market position and go-to markets. It’ll also provide an insight into whether you should invest in, or nurture, a strategic alliance.

4.    Collaborate with agility and rigor

Once all the preparation stages are complete, the process itself can begin. Here, it’s crucial to be clear on decision-making and timelines – and simplify them wherever possible.

The most successful organizations also make sure to propose simplified contract templates that are specific to the startup and approved by the purchasing department. This provides the structure required for everyone to collaborate with agility, moving freely within the guidelines of expectation.

It’s a good idea to establish a dedicated single point of contact: someone within your organization who can connect the startup with the relevant contact they need based on the project type.

The business collaboration framework, defined by Capgemini Ventures, has industrialized this set of guidelines to collaborate with startups, which speeds up GTM and provides risk mitigation strategies to be implemented.

5.    Accelerate to adopt at scale

When the priorities are established, the business alignment model is defined, and the contracts are signed off, it’s time to scale and accelerate innovation across the global enterprise.

You can mobilize and access the relevant resources required to make scaling easier. You can promote collaboration internally and externally to help the startup grow. And you can start working towards reaching the desired outcomes of the collaboration.

However, you must remember to keep working at it in order to achieve success…

Bridging the gap between business and technology

In conclusion, it’s become clear that bilateral partnerships are no longer enough. Each partner must understand every other partner’s wider ecosystem. If we all do that successfully, then we’ll collectively benefit from some truly exciting and innovative ideas.

As the bridge between business and technology, Capgemini is here to help our clients adopt startup solutions at scale. A startup is a partner unlike any other and our open framework is fine-tuned to your organizational requirements to enable you to adapt and build – it’s a strong foundation for creating a mutually beneficial relationship for both sides. For further insight into the other major considerations around bringing startups into an effective ecosystem, don’t forget to keep your eyes peeled for the forthcoming blogs and vlogs in this series. Meanwhile, you can catch up on the opening blog article of the series here.