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Creating trust and transparency for investment clubs through technology


Lauren Wilson - July 26, 2018 - 0 comments

Creating trust and transparency for investment clubs through technology

According to Gallup, only 32% of Americans’ have confidence in their banking institutions. And although this confidence has improved by 5 points by 2016, the numbers are still daunting. At the same time, brand monitor polls from Instantly Brand Monitor, in cooperation with Statistica demonstrate another challenge. Americans trust tech firms, such as Apple, more than Banks for finance. Americans are burdened by their finances with 30% stating they’re “constantly” stressed about them. How do you build trust for investment clubs in such a challenging landscape? One way is through technology. Here are a few ways that technology can enable trust and transparency for investment clubs:

Clear, accessible, automated data and reporting

Knowledge is power and access to data enables knowledge. Today’s technology makes it simple to provide your clients access to their data. Balance access to raw data with curated reports to help clients understand insights they may otherwise miss. This approach highlights your unique value and builds trust and confidence.

For investment clubs, equal accessibility to members ensures each member is equally empowered to contribute, and no one member is burdened with extra paperwork or number crunching to keep the club up to date. Look for opportunities to leverage your technology not only to automate and improve processes that involve the direct transactions with your institution. Look also at the end to end cycle of an investment club and their needs. Offer date and reporting solutions that make your financial institution easier to work with. Investors want to ensure that their money is going towards and growing their investments. Aligning technology and processes to your fee structure and communicating them transparently about fees is important.

Provide reliable online research data

Technological advancements have increased the availability of information and data online, making knowledgeable investing more accessible than ever. However, information available on the Internet is not regulated. It is a challenge to determine its accuracy, reliability, and to differentiate fact from fiction or sheer opinion. You can help guide your investors by providing access to curated, reliable content sources through your secured platforms.

While investment clubs may not be looking for specific investment advice as individual investors would, they are looking for informed information on the markets. Among the curated trusted sources you can also host in-house articles and blogs. This is an opportunity to demonstrate your firm’s investment expertise and highlight the unique value of your organization and employees.

Make privacy a technology priority

Privacy is a significant focus and concern for consumers and regulators alike as new technologies are introduced and more is done online.  61% of Americans have said they would like to do more to protect their privacy online. Additionally, two-thirds have said current laws are not good enough in protecting people’s privacy. Your organization needs to take privacy seriously and implement and maintain the highest standards to protect your client’s data through your technology. It is equally important to revise and communicate your privacy policies in clear, easy to understand language. These policies need to be easy to find and reference, further demonstrating your transparency.

In light of some of the recent headlines, it may seem counter-intuitive that technology, which has been blamed for much of the distrust to date, should be promoted as a solution to improve trust. However, when you consider how traditional investment clubs operate, you can start to see the opportunities. In a traditional investment club format, member’s personal information and trade details are passed through multiple mediums, from paper forms to e-mail to online registrations. They cross these mediums many times for members to agree, execute and report on trades. The safety of that data and quality of privacy security is only as good as the weakest link.

It is believed that as the digital world expands, distrust will grow. Choosing to not participate in this quickly evolving digital world and harness technology is a missed opportunity. Taking too long to decide your position will make it nearly impossible to catch up. Financial institutions have a unique opportunity to invest, develop and partner in technology solutions which not only provide high-value for its clients but also focus on building trust and transparency. Those that do this well will be rewarded, winning more loyalty from investors. How does your organization build trust and transparency with technology? We’d like to know. Share your thoughts by getting in touch at support@myvoleo.com.

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