Bill Hortz's picture

"While digital transformation is not easy, once you undergo the process, the efficiencies and effectiveness of the organization increases tenfold." - Michael Pinsker, Docupace Technologies  

[The Institute for Innovation Development has documented our stance that the greatest challenge for advisors today is dealing with a rapidly accelerating rate of business change – an operating environment that we haven’t been previously trained in or been equipped to handle. Technologies driven by FinTech companies are quickly rising to the challenge and providing much needed support, especially in the area of becoming a digital firm.

There are explosive gains available right now in operational efficiency, productivity and enhanced profits by shifting traditional practices and legacy systems towards a digital infrastructure. Digitizing enables you to streamline client on-boarding; administrative and compliance workflows; and automates the way front-to-back offices operate, communicate and generate new business. The process of digitizing everything allows for the fluid, efficient control of your company’s data and client information and the increased ability to analyze and glean more insights about your business and your clients.

 Being a digital firm is the only way to have the business management and innovation agility to learn quickly, experiment with your customers, and pivot your business models to move on new opportunities and truly compete in our new operating environment of accelerating change.  It will equip you with the new level of business flexibility that is mandatory for survival, let alone competitive advantage.

To better understand and explore this important issue and how to best engage with digital FinTech solutions, we decided to talk to Institute member Michael Pinsker, Founder & Chairman of Docupace Technologies  – a financial technology company that has created a cloud-based digital operations platform with data driven client onboarding, unified workflow and document management automation capabilities. Our goal is to better understand how to implement a digital transformation for your firm. ]


Hortz: We keep hearing about the crucial need for financial firms to go through a process of digital transformation. What is truly meant by that and why is it so scary sounding?

Pinsker: When we talk about digital transformation, we are speaking generally about any business process that uses digital technology instead of paper.  Opportunities for digital optimization exist across all offices and departments within a firm - anywhere from client onboarding to recruiting to basic document handling that is part of any operation of a wealth management firm.  When one looks at the issue of digital transformation, there are many factors that go into figuring out what is right for a given organization. 

The scary part of it is just that – transformation.  That is because transformation means change and change is difficult; especially when you go from existing paper driven processes to a new way of doing business.  It means policies and procedures will change, the technology will be new, people will have to adapt to different ways of handling tasks. 

But what I can tell you from extensive experience is that people can manage and embrace change when they are fully aware of and see the scale of benefits for doing so. Educating everyone in advance of the explosive gains in efficiency and competitiveness for the firm can drive wide-scale adoption for that change. Bottom-line reality is, when people realize it is essential, they understand the benefits to themselves and the company, change is very doable and less scary.

Hortz: What do you recommend is the most important mindset or approach needed to start this transformation process?

Pinsker:  At Docupace, we always advise our clients to start with the questions about the goals of what you are trying to accomplish.  There is a lot that can be done and the transformation process is a journey.  It takes time, but if you have your organizational goals outlined and keep them front and center, it will allow you to ask the right questions, to focus on the right things and achieve the best outcome possible. 

Hortz: What are the biggest concerns you have seen at this early stage that derail the beginning of the process and how have you best addressed them?

Pinsker: We have seen a misalignment within organizations between the stakeholders and people on the ground that caused the process to go south right out of the gate.  To avoid any misunderstandings, our proven methodology calls for the creation of alignment between all stakeholders, client project teams, and Docupace’s professional services team at the start of the process.

The other concern is taking on too much initially instead of managing the transformation process in bite chunks in order to build some immediate initial successes and continue to expand on it gradually.  The transformation is a complex multi-phased process and can quickly get out of hands if not managed right from the beginning.  We typically recommend defining the easy win early on and then building on top of it.

Hortz: What options do firms have in the implementing stage that may ease some concerns and lead to greater success in the process?

Pinsker: There are number of options that firms have to increase the chances of success.  We recommend starting with defining dedicated teams to manage transformation.  The transformation process benefits from having alignment and a focused team greatly increases chances for success.

Other options include developing a tighter plan and detailed communication procedures with your technology vendor that is the cornerstone to the transformation.  Establishing a close partnership with the vendor, who is very experienced in driving transformation for similar organizations, is paramount.  It will also help create commitment and remove some of the concerns. 

Lastly, putting emphases on training and teams support during the transformation process, even after they go live, will have a great impact on the success of the project.

Hortz: What then are the specific first steps you suggest firms go through to start the journey?

Pinsker: We have put together a detailed  Docupace guide called How to Develop a Paperless Office Strategy which walks wealth management firms step by step through our recommended digital transformation process. The initial steps I would recommend are:

  1. Set empirical goals for your initiative.
  2. Develop your initial digital/paperless policy
  3. Select a technology vendor who will be a partner with you throughout the process and beyond.
  4. Identify an easy win for the organization early on.
  5. Educate all Stakeholders and Investors.

Hortz: What other best practices have you seen that drive firms to successful implementation?

Pinsker: The best successes we have seen are from the firms that take the transformation seriously and not underestimate the effort and the impact of it.  That is manifested and driven by proactive and consistent communication with stake holders, team members and everyone who is affected by the transformation. I cannot emphasize enough that we see a commitment to training and support - that is focused on adoption of the new way of doing business –as super critical for the long term success of the transformation.

Hortz: Any last best advice would you like to share especially to advisors and small-to-midsize financial services firms?

Pinsker: While the digital transformation is not easy, once you undergo the process, the efficiencies and effectiveness of the organization increases tenfold.  Embrace the change, be thoughtful about what is important in your daily operation and be ready to compromise in order to launch it.  The initial set of processes will be different and may not be perfect, but through the process and continual improvement the result will be amazing. Note that according to a Fidelity study, 97% of advisors who have gone digital have stated that paperless solutions have helped their firms. Most importantly though, your clients will enjoy seeing you using latest and greatest tools as it will help establish better relationships and better connection with them.

The Institute for Innovation Development is an educational and business development catalyst for growth-oriented financial advisors and financial services firms determined to lead their businesses in an operating environment of accelerating business and cultural change. We position our members with the necessary ongoing innovation resources and best practices to drive and facilitate their next-generation growth, differentiation and unique community engagement strategies. The institute was launched with the support and foresight of our founding sponsors - Pershing, Voya Financial, Ultimus Fund Solutions, Fidelity, and Charter Financial Publishing (publisher of Financial Advisor and Private Wealth magazines). For more information click here.


Sign Up for Your Free Innovation Newsletter