Those of us working within the financial services industry are only too aware how important it is to safeguard sensitive information against data breaches and other cyber threats.
Digital vaults play a vital role in that. The perhaps unexpected embedded value of adding a secure digital vault to your technology stack is that it also enhances your overall client value proposition.
But first things first, what is a digital vault?
Digital vaults
Not too long ago bank vaults, along with storing cash and other valuables, housed safety deposit boxes on behalf of customers. These boxes contained important documents and other items which the customer could view, remove or handle when needed. Accessing these boxes was a time-consuming and onerous process.
Authorised bank staff accompanied customers to their box which could only be opened in their presence with, typically, two keys, one belonging to the bank and the other to the customer.
Today, technological developments have turned the safety deposit box into a digital vault – that is, a secure cloud-based digital filing system which uses encryption technology and digital authentication to protect data and documents from cyber theft and disasters.
Digital vaults and the financial advice practice
As an adviser, you obviously have an obligation to ensure the security and confidentiality of all client records and information, to protect it from unauthorised access and to safeguard it against threats.
If you email things like client fact-finds, superannuation statements, health questionnaires, etc. you potentially expose your client’s information to cyber risk. If you handle this kind of information in a traditional way, that is, you print it out, file it away in a cabinet, or leave it lying around on a desk, you also expose your client’s information to risk.
The safest place for every client to house their information is in a digital vault. You can play a valuable role in providing them with access to a digital vault, protected by an encrypted password and two factor authentication.
By helping clients make copies of all their important documents and information and uploading these into a secure digital vault, you offer them peace of mind. You send a message that you take the security of their information very seriously and this improves trust and enhances your value proposition.
How safe are they?
Many clients may be concerned about uploading their sensitive documents to the cloud, so it’s important to explain that digital vaults must comply with regulatory data and privacy protection rules and meet strict security standards for cloud-based solutions.
Communicate that strong encryption and multi-factor authentication safeguards their documents from unauthorised access and that all uploaded documents are scanned for known viruses and malware.
They also need to know that their documents are protected against unintentional loss, as they are backed up every night to multiple, geographically dispersed data centres.
How do they improve the client experience?
At a simple level, digital vaults improve the client experience merely by providing a safe and secure central location to house personal information and documents any time, anywhere.
Clients, and usually related parties, such as their families and/or beneficiaries, know where all relevant information is held. This is particularly useful when there is a change in circumstances, such as the passing of a family member, liquidity event, or the retirement of an adviser.
A digital vault not only offers huge time-saving benefits for clients and their next-generation, it is also of massive value for you and your team because it serves as the single source of truth for information with the client and, if the client agrees, other family members and beneficiaries.
Digital vaults have, in fact, proven to be a key driver for advisers looking to navigate the intricacies of estate, succession, and wealth transfer planning.
Digital vaults can also provide you with:
- Accountability – decreasing the number of non-conformities in compliance document audits;
- Efficiency – reducing the movement of documents by emails to your clients and back;
- Structured compliance – developing activities that ensure all documents and file notes are stored and available to clients in a compliant way; and
- Protection – storing all client documents in a digitally secure environment.
This allows you to scale your document management processes, further extending your value proposition to clients.
All this ultimately means that you provide an improved and more efficient client service which improves trust and creates more value for all.
What documents should be saved in the digital vault?
A client should upload and securely store documents in their digital vault relating to:
- Financial planning;
- Investments;
- Estate planning;
- Asset ownership;
- Insurance;
- Tax;
- Personal identification;
- Medical records;
- Valuation certificates;
- Photos and videos; and
- Service provider accounts
While digital vaults are for storing important information and not for collaboration, when embedded in a client portal, a digital vault has the potential to help you make a step change in client experience, enhance client engagement and with that, your overall value proposition.
