Digital Transformation was one of the most important business trends across the wealth management circles before the unprecedented global disruption shifted all the focus towards ensuring business continuity.  Recognizing the changing digital behavior, leading RIA custodians, broker dealers, TAMPS, RIAs had either embarked or were kickstarting their digital transformation journeys. The disruption caused by COVID 19 has clearly laid bare the nascent stages of digital evolution for the many wealth management players. The customer service centers are overwhelmed with increased call volumes and reduced capacities. Similarly, financial advisors are required to field multiple long calls from anxious clients who are uncertain about their investments. Low adoption of digital assets provided by broker dealers and RIAs firms may be a result of sub optimal CX or gaps in information availability. We all may be in a long period of disruption, and the firms that are not able to drive digital adoption, or continuing to remain person dependent will realize the difficulty in client servicing, let alone operational scaling.  Digitalization needs to be looked at as an essential part of the wealth manager’s business continuity efforts as it ensures information availability and provides online self-service capabilities. Digital Insulation is another complementary term that offers an ambitious glimpse of future possibilities.  To protect their businesses from personnel-related disruptions, organizations will need to invest digitalization and thus ensure business continuity.

Drivers of Digital Transformation

Digitalization in the wealth management was primarily driven by the following drivers:

Drivers of Digital Transformation

  1. Changing business model– The business model has been steadily shifting away from a product focused brokerage model to a relationship focused advisory model. In a study conducted by , the consolidated commissions revenues for the top 50 Independent broker dealers have reduced in the last 5 years, while the advisory fee has increased by more than 50% in the same period. Shifting client base of advisory clients expect engagement across multiple channels and customer experience becomes paramount.
  2. Revenue compression– Zero commissions are already a reality and were a seminal event for the industry. Revenue impact for the players will range from anywhere between 10%- 20%. Also, RIA custodians are likely to levy additional fees on the participants to cover for the lost revenues. With the fed rates likely to remain low for the foreseeable future, the revenue stream from sweep accounts will also reduce substantially further, thus accentuating revenue pressures.
  3. Changing the age mix of client and advisors– As the wealth transfers from baby boomers to the millennials, the millennials will make up for an increasingly valuable client segment. Similarly, as the ageing advisor population retires, the new advisors will primarily be dependant on technology, largely influencing their business decisions.
  4. Fin Tech Disruption– Advisor Fintech tools, also known as Advisor tech, have not only invaded the usual favorites domains such as CRM, financial planning, and portfolio management but have created new advisor tech segments such as mind mapping, account aggregation, forms management, social media archiving etc. 2020 T3 advisor software survey covered almost 500 different tools across almost 30 sub segments highlighting the plethora of tools available for clients and advisors.

The above drivers are creating two main needs for the wealth management players:

Need to Scale Servicing. The first two drivers (changing business model and revenue compression) are forcing wealth management players to realize the need to digitalize and gain operational scale for servicing more clients. In a study conducted by, servicing clients was cited as the most important digital driver for the wealth management firms. The ongoing disruption will further fuel the demand for straight through client onboarding, E- account opening, digital signatures, and workflow-based proposal generation solutions. Moreover, the organizations that still depend on back office processors to open accounts and onboard clients will see an increased transition. Similarly, advisors and clients need to be provided with tools to move to a more self-service model.

Need to Scale Knowledge– The last two drivers (changing Age mix & FinTech Disruption) trends have resulted in increasing client and advisor expectations. An increasing number of clients no longer just delegate their investment decisions to advisors but also seek to collaborate and validate the investment decisions. They look for real time knowledge about their current investment and investment insights. With the prevailing uncertainty, many clients will also start demanding real time information about risk tolerance of their portfolios are and how they can quickly pivot to either protect their investments or to take advantage of any profitable bargains. The clients will naturally drift towards financial advisors who provide full-service client portals to access and monitor their investment. Similarly, advisors will drift towards firms which provide digital practice management tools and advisor self service capabilities.

The third form of scale which will become very relevant in the current disruption is Scaling digital collaboration. With Social distancing becoming the norm, in person client meetings may not be possible for some time. While advisors and clients can still talk and make video calls, current tools do not allow for collaborative discussion or presentations. Going forward, the organizations will need to invest in tools that enable online client engagement and advice delivery as a complimentary engagement channel. Software providers can study the evolution of telemedicine systems, which provide a full suite of features including video conferencing, document sharing, scheduling appointments, taking notes, as well as client history. Once client portals or CRM systems can be enhanced for Tele Advice, this alternate engagement channel is likely to grow in popularity with both clients and advisors, allowing remote collaboration and engagement.

To sum up, digitalization is the best antidote for any such future disruptions, which will be assisting wealth management firms in modernizing advice and accelerate their digitalization efforts to not only transform but to insulate their businesses. Digitalization can in fact become a vital cog of the business continuity efforts by enabling self-service, information disintermediation and collaboration.

Even in stable times, Pharma supply chains are fragile and as complex as they can get. As the Covid-19 pandemic continues to wreak havoc on countries around the world, Pharmaceutical supply chains have come under immense pressure. In this article, we would cover some of the key challenges which Pharma supply chain Executives face on the frontlines, and how Analytics and Data Science can be leveraged to overcome these challenges.

Covid-19 disruptions are going to test the strength of Pharma Supply Chains:

  • Stockouts are a real risk: According to a study by University of Minnesota, 80% of the drugs marketed in the United States, including 19 of the 20 top-selling brand names, are made overseas. The global nature of supply chains, regulatory challenges and high uncertainty makes stockouts a real risk – jeopardizing the health of millions of patients who depend on life saving drugs
  • Operational metrics for Pharma Cos would need drastic improvement: With an average inventory of 258 DoH , the Pharma industry has one of the largest inventory stockpiles – 2-4X larger than FMCG at 72 DoH. However, given the staggering scale of this pandemic and the real risk of stockouts, Pharmas would need to rethink and optimize their inventory allocation strategies to ensure that the current inventory of drugs is allocated to the channels and regions with the most urgent need
  • Shift in Consumption Patterns: As drugs are identified as potential treatments for Covid-19, the demand may quickly surpass the supply.  These drastic shifts in consumption patterns have already been observed with Covid-19 treatment candidates e.g Genentech’s  Actemra, Sanofi & Regeneron‘s Kevzara and Gilead’s Remdesivir, an experimental drug for Covid-19. In early April, the FDA reported shortages of hydroxychloroquine and chloroquine, antimalarial drugs that were speculated to be front-runners for a possible Covid-19 therapeutic. This shortage has impacted patients with Lupus, where chloroquine is a life saving drug
  • Long-term Cyclicity of a Recurring Pandemic: Taking a page from history, the Spanish Flu epidemic hit in waves, the second wave more lethal than the first.  If the Covid-19 virus proves to be seasonal, the impact of the pandemic might happen in waves over a 1-3 year period before stabilizing. Pharma Cos should be prepared for detecting and responding to new drivers of demand with very high momentum. Some new drivers of demand could be – preference for self administered drugs due to a drop in hospital visits, higher propensity for hoarding and increased demand for normal uses of certain drugs e.g  acetaminophen to treat fever & flu symptoms

Given the scale of disruption, how can Pharma Supply Chain Executives approach these challenges ?

A combination of strategic and operational moves leveraging Analytics and Data Science capabilities will help you get to the critical insights necessary for getting started.

  • Gain a realistic view of your current state: Creating a transparent view of your supply chain and assessing the current state is your first step. Quick dashboards and ad-hoc analysis will give you a perspective of what is happening on the ground, and in the moment. The views should be built to assess 3 key stages in your Supply chain:
    • Multi-tier Supply Assessment– What are the most critical components of Supply? What is the risk of interruption? What is the next best action for high risk Suppliers?
    • Inventory Audit– Where does your allocated Inventory lie both in-house and with distributors? What amount of this Inventory is finished goods vs blocked  for quality control and testing? What is the volume of Inventory in transit?
    • Demand – What is the most realistic estimate of customer demand?  Are there any specific NDCs with disproportionate impact on demand? How is the demand distributed at the Distributor, Geo and NDC level? Are the underlying assumptions of demand signals still robust? What are the emerging drivers of demand which might be getting missed?
  • Break down your perspective – Short term and Medium term: Organize your efforts with a Covid-19 Command center which would provide a perspective on  ‘Short term Crisis management’ and ‘Medium term Planning Ahead’ initiatives. This would ensure that teams on the ground continue to have bias for action, without  getting blindsided by what’s coming ahead.
    • Crisis Management teams– Focus on the most immediate tasks where speed is of essence. This team would focus on the most high impact disruptions and build quick dashboards/reports to get a transparent view of the current situation and generate critical insights for operational teams on the field
    • Planning Ahead teams– Look ahead to answer questions on mid-term and long term impact – like testing underlying assumptions, bringing in new intelligence from external analysis, identifying and integrating new signals and data sources into the analysis and developing scenarios for the future
  • Develop Scenarios for multiple versions of the future: The nature of the current Covid-19 pandemic is such that the arc of impact would be varied and staggered across the world. Take the US for example, every state and county is experiencing the pandemic differently. Hence, supply chain teams need to develop a scenario based decision making frame to assess how the pandemic would pan out, and what are their best moves at the moment . Here , the scenarios need to be built at 2 levels :
    • External Scenarios– Evaluate impact of the pandemic and effectiveness of the response at macro and micro levels across countries, states and down to county levels on key metrics like demand and supply
    • Internal Scenarios – Simulate impact of moves based on a Pharma’s ability to respond to the crisis. This would involve tweaking Supply chain parameters like manufacturing and shipping lead times, safety stock assumptions to identify what is the next best action that should be taken by Channel Inventory, Demand Planning and Manufacturing teams in the medium and long term
  • Factor for Uncertainty and Anomalies:  During times of uncertainty , one of the most powerful tools in the arsenal of Data Science is Anomaly detection. Over here, the unknowns are shifts in consumption patterns and cyclicity of recurring pandemic which would be hard to detect with human judgement. Once fed with the historic data, powerful ML algorithms can help you quickly spot unknown unknowns in your data, down to the most granular levels of detail – helping you set up algorithmic trigger points to flag alerts. This should be one of the key pillars of response for the  ‘Medium term Planning Ahead’ workstream. Some examples of metrics to be looked at:
    • Analyzing past demand patterns with anomaly detection models would help quickly spot which NDCs are impacted by the shifts in consumption patterns to predict stock outs at zip code level
    • Anomaly detection algorithms to flag emerging new hotspots of emerging Covid-19 cases at a country, state and county level impacting distribution and logistics
  • Be prepared for a fundamental change in the nature of your Data: With more than 3 billion people in lockdown, this epidemic will bring dramatic changes in patient, distributor and regulatory behaviors around the world.  Covid-19 is a perfect example of a ‘structural break’ in your time series data – with implications both in the short and the long term. Pharma companies might need to look for unconventional sources of data for getting insights during times of uncertainty. For example  – Google Search trends have been found to be good predictors of demand for certain types of drugs, and can also help us find emerging Covid-19 outbreaks. They can also reveal symptoms like ‘loss of smell’ that at first went undetected.

The current crisis has plunged entire countries and the Pharma industry into times of uncertainty. Building a transparent view of the current state, scenario based planning and proactive detection of anomalies are key tools on the frontlines for defense.

By acting intentionally today and using the tools at our disposal, Pharma companies can weather this crisis, emerging stronger and building resilience for the future. And in the process, enhancing and saving many lives around the world.

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