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Episode 41: “Elevate the Experience” with Rob Krugman, Chief Digital Officer at Broadridge

Rob Krugman, Chief Digital Officer at Broadridge, speaks with Matt Swain about the importance of architecting the customer experience and adopting next-gen communications technology.

Matt: I'm Matt Swain and you're listening to the "Reimagining Communications" podcast, where we discuss the opportunities and challenges facing companies on the road to optimizing their communications for the future. Today, I'm joined by a familiar guest of our show, Rob Krugman, Chief Digital Officer at Broadridge. Rob, thanks for coming back on the show.

Rob: No, thanks for having me, looking forward to the conversation today.

Matt: So, Rob, it feels like my new opening these days, but I don't know how we can't start with COVID. How has COVID changed client discussions for the discussions that you've been involved with?

Rob: The biggest change that I've seen and I think one of the biggest outcomes we're gonna see from COVID is the reliance and the availability of really, really good video conferencing capabilities. The ability for people to communicate in a much more effective and I actually think personalized way electronically than we did before, where we largely just use telephone calls and conference calls to communicate. I think video is here to stay. I think that's kind of one piece of it. I believe the other piece is that it's really opened up this idea that everyone is digital.

Historically, I believe some organizations had this kind of mindset that a percentage of their clients aren't as digital as the other percentage of their clients. I think what we've all recognized coming out of COVID is that just about every demographic of customer, I mean, every demographic of the population is using digital technology in one way or the other. And if COVID presents, and I hate to use the word opportunity, but COVID almost presents this opportunity where historically it's been hard to facilitate digital transformation, whether it was driven by the CTO or the president of an organization. The driver of digital transformation has been a pandemic and has required us to make changes in the way that we work, the way we interact and the way we communicate. And a lot of this I think is gonna be long-lasting.

Matt: Yeah, I couldn't agree more. I think the theme of COVID as an accelerant to digital transformation is really proving itself out with the discussions that I'm having and especially with clients who already were on that path to increase digitization. And they've just gotten the bump from more their clients looking for ways to interact digitally, but also that increased pressure within the organization to reduce operational costs.

Rob: I think it's operational cost. I think the other aspect is the compliance component. I think a lot of firms and organizations were reluctant to do certain things historically, and this has kind of highlighted that there is an opportunity disrupt. You know, it's really leveraging of strong experience on the digital side and tying that to what you're trying to communicate, presents an opportunity for organizations to really rethink all different types of functions. And when it comes to outbound or frankly, even inbound communications, it allows them to take a fresh start and really understanding what that journey should be and then align the journey to today's market and expectations.

Matt: I know it depends on who you talk to within the organization but I would agree with that latter statement, at the same time we have clients that are hyper-focused on just driving cost out of the process. How do you balance that discussion with clients in terms of helping them understand the other benefits that they can achieve beyond the cost reduction, but also get them to buy into maybe taking the extra time to create more compelling experiences, versus just trying to figure out if they can use regulations to their advantage to drive suppression?

Rob: The interesting thing is that you can't do one without the other, right? Experience and digital adoption are linked. So, let's take the example of a firm that has a desire to take all the costs out and drive digital delivery. The challenge with that is the expectation or the experience you're providing your customer. And if these are purely outbound communications, maybe you don't care. I think you do and I'll kind of get into that in a second, but the implication is we distribute communications for a certain purpose? It's either to educate, provide literacy or to facilitate an action, like paying a bill, or opening an account, or driving engagement. If you don't focus on experience, what you risk is you take a highly engaged customer on the physical side where we know if you are a provider and you distribute something to someone physically, they read it, they get it in the mail, they open it, they read it, if only for a moment, they recognize what it is. When you deliver documents electronically an interesting thing happens. Open rates typically end up being about 20% and click-through rates typically drop a little 5%. That's a big problem, because if you're asking your client to actually do something, you can lose all that engagement. Why is experience important and why are they linked? Because with strong customer experience, you can engage the customer in each of these communications. So, you can drive digital, but when the user gets it, they recognize what it's for. There's context. It's about them, it's personalized, it gives them a reason to engage. It answers questions that historically they maybe would have called the call center for. And the one example I often use is a major U.S., telco company several years back made the decision to default all of their clients to electronic delivery. So, what happened? They did that towards the end of the year. One month went by, two months went by, three months went by. A large portion of the client base was not paying their bills. They then started to receive text messages because again, these are mobile telephone companies, that said, we're gonna turn off your service if you don't pay your bill. The call center then was inundated with phone calls, I didn't receive a bill. Oh, we defaulted you to electronic delivery so you'll received it for email. Yeah, I didn't see it. And so, you had this horrible client experience that was really driven by an operational goal that didn't include the other components, didn't include the experience. So, how do you actually go about doing this? You think about the operational components of what you're trying to achieve. Obviously compliance and legal are here, but you bring in the marketing folks, you bring in a digital folks. So, you create this holistic experience that drives the engagement and drives the purpose of the communication and doesn't simply just send someone an email that says the document is ready, click here to go and get it.

Matt: Yeah. And I think that's where we run into challenges sometimes within our client base or other companies we're talking to, where there is somebody with an operational objective and their bonus might be tied to it for some level of suppression. And the easiest thing for them to do is to focus on what's in their realm of control and just execute on driving that suppression rate. Now, what you laid out is exactly where we want companies to be headed, but it does require a holistic strategy, a more comprehensive approach, and maybe a more thoughtful execution than just pulling some levers to drive that suppression.

Rob: Yep. Well said. And the way that we come about this is we typically start with a workshop mentality. And the goal of that workshop is to kind of define the objectives, right? And any of these workshops you start, what's the objective? We wanna save money on paper communications, we're going to... We get that. We understand that. What are the other objectives we can achieve through strong communications that are delivered digitally? I think the idea is that these communications should be thought of much more as touchpoints with your clients than simply as regulatory obligations. And when you think that way, you start to create kind of a multifaceted scorecard by which to measure the success of a communication strategy. And the realization becomes there's opportunity for both save and for value generation. And when put together the numbers you can achieve and the stories you're able to tell throughout the organization become much greater as a result.

Matt: Yeah, Rob. That makes me think of one of the initiatives that we're working on at Broadridge, which is Wealth InFocus. And I'd love to have you talk a little bit more about the setup in terms of what we're seeing in the wealth communication space today and how we envision we can help really transform those experiences.

Rob: Absolutely. So, Wealth InFocus really came from this idea, it was an innovation activity. And we asked ourselves this question, if we had the opportunity to reimagine investor communications, what would it look like and where would it start? So, like any good innovation activity where we started with was foundational research. And we focused initially on the investor. What does the investor experience look like? And when you look across the wealth industry, arguably more than any other industry, the number of communications that are distributed to clients is overwhelming. Between regulatory communications, like prospectus documents, and annual, and semi-annual reports and proxy communications to documents about your account, like statements and confirms and letters and notices and tax documents, to marketing communications and communications from your advisor for a full service client of a full service firm. On average, they're probably receiving somewhere between a hundred upwards of 200 communications a year from that particular firm. And the challenge is obviously a lot of this is regulatory driven, but the challenge is it almost becomes noise because you're inundating these customers with so much content, they have a difficult time of understanding what's important and what's not. And then when you take a step back and you start to look at today's physical experience versus today's digital experience, physical experience, really easy. We pull in to our house or we walk into our apartment building, we open up our mailbox, we pull out our content. We look at the information that came from the firm and we quickly determine what's useful and what's not, but we look at it. Think about the electronic experience. You receive cryptic email alerts that tell you there's a document waiting for you on a website. Sometimes they have a link, sometimes they don't. You then have to go through a series of steps to be able to access those materials. And then undoubtedly, what happens is people lose interest and you don't follow the steps. So, we're losing engagement as part of the process.

So, what we did, kind of taking these major issues, hundreds of communications, perception that they become noise because there's so many of them. And we asked ourselves if we were going to start from scratch, what would we do? We really did research in three areas: what are their needs of the investor, the advisor/firm, and then the issuers, the public companies and mutual funds. And what we found is that what investors really care about is context. They want communications that are relevant to them and simple to understand. When you speak to advisors, they want communications to reinforce the value that they actually bring to the relationship. Firms, very much the same thing with the obvious addition of they want to save money. And then the public companies and mutual funds, they want to  brand the value of their securities, but at the same time they want to save money. So, if you take that into account, you start to end up with this focus on what should these communications do? And what you get to is they should be insightful, they should reinforce value, and they should drive engagement when engagement is required. So, with Wealth InFocus, what we did is we took these hundreds of communications and we said, what if we broke them down differently? What if we looked at an omnichannel experience that was both leveraging physical capabilities and digital capabilities? And the cadence of these communications would follow a few rules. First off, everyone gets a monthly statement. So, we're going to replace that monthly statement with a new type of communication and I'll explain that in a second. And then in the middle of the month, based upon certain activities that happen, there were on-demand type communications that may need to go out the door.

So, let's start with this kind of monthly, quarterly, annual communication. What should it say? Well in the digital world or the physical world, it should give an overview of what's happening in your account, performance, how you're approaching specific goals, a detailed list of what transactions have actually occurred. It should tell you what's happened since the last time they communicated with you, right? And that could include performance information, it could include information on new documents that are available about the securities that you hold, and it should tell you what's about to happen. There is a corporate action that's coming up or a proxy that you need to vote in. There's a meeting with your financial advisor. And they should provide opportunities for firms to include contextual research and information that's relevant to you as an individual. And it should be simple, quick to read, but it should provide me with the ability to go from this simple summarized communication down to the details if I so want. So, if I want to get down to the traditional statement, I can click through in the digital world. If I'm in the physical world, a simplified physical communication that's not 20 pages long, maybe is 1 or 2 pages long, but there's a QR code embedded in that if I point my camera at it, it allows me to see all the underlying details electronically. So, that's step number one.

Step number two are these intermonth communications. And if you think about what they are, think about trade confirms, think about regulatory distributions like annual and semi-annual reports and prospectus documents. And then think about when times of craziness or times of trouble happen, the need for the advisor to outreach to their customers. So, if you start with the kind of the confirms, confirms have a regulatory requirement of T + 1. Given that many financial advisors make changes at the same time, we want to send an integrated aggregated communication that highlights all the changes in one email or physical document but provides context. Maybe a note from the financial advisor that says, I made some changes to the account, if you have any questions, here's how to get in touch with me. When it comes to the regulatory communications that happened in the middle of the month, maybe once a week these go out instead of every day. And when they go out once a week, again, you're receiving these communications because of information, the holdings that you have, if you have questions, here's how to get in touch with me. And then lastly, the market drops 2,000 points that week an opportunity for the advisor or the firm to push out a communication that essentially says, I know it's been a crazy week, here's a description of your achievement towards your goals. Things are good, right? The week's been crazy, but things are still headed in the right direction. If you have any questions, here's how to get in touch with me. It's this idea of reinforcing value.

Now, what's the benefit of this omnichannel model towards this? It's that not only are we reducing the number of communications, so we're making each one of them more effective. But on the physical side, instead of sending out a 20-page statement, 15-page tax document letters and notices. We're simplifying that, we're wrapping that into a, maybe a two-page printed document that provides an overview, satisfies the regulations and points the individual to the digital channel. What we're finding is if done properly, this provides an opportunity for 30, 40% immediate savings when it comes to the printed channel, because you're reducing the number of communications and the size of those communications, but also providing a connectivity that drives the individual to the digital channel through personalized QR codes specific to that individual. So, I said a lot there.

Matt: No, it's great. It's clearly something that you're passionate about and it's something that's really interesting in the wealth space in particular, because it really does follow this theme of a fully reimagined communications experience.

Rob: I think so. And the other thing it does, is it recognizes the needs of all the stakeholders, in particular in the full-service model. And this is also relevant in the self-service model, but in the full-service model, it recognizes that there's a really strong relationship that exists between financial advisors and their customers. And that relationship really should be at the forefront of every communication that goes out. Why is that? Because today people receive communications that look like they come from different places. Here, everything's branded the same way, the messaging has been thought out, it's personalized. And while personalized, it's still templated so that the messages can all be approved by compliance and legal, but to the recipient, this is an individual that has my best interest at heart. And hopefully I begin to understand the value of that, and I become a net promoter where if you're a firm, that's the biggest thing you want. You want your customers to tell their friends and family to come to you because you're so good at what you do.

Matt: And Rob, I think something that's so interesting in what you're talking about when you talk about bringing together marketing, transactional, regulatory communications is the importance of taking these through a centralized platform. Can you talk about why a platform approach is so important for clients today relative to their communications ecosystem and talk to us a little bit about the Broadridge Communications Cloud?

Rob: Definitely. So, probably like every other major organization that exists, Broadridge is going through a digital transformation. And, you know, I view digital transformation as bringing together three things, right? There is technology. And sometimes people only think about digital in the forms of technology. Experience. Again, sometimes people only think about experience. And information and content. And some people only think about those. Digital transformation in my view is all three of those things combined. And so, what does that mean when it comes to a platform? What it means is that a platform needs the ability to integrate data from a variety of different places. It needs to be able to deliver next generation robust experiences, experiences that match up against what people have learned to expect in their everyday lives. And so, who we all are competing against, we're competing against Google and Apple and Amazon. The experiences that they deliver is the expectation of our customers.

But then it becomes this question, how do I put it all together? And if you think about go back 10 years ago, communications platforms did everything. Feed in data, 15 different things happen, out goes communications on the other end. That's not the way things work anymore. The way things work now is everything is moving to the cloud and everything is leveraging open services in the form of APIs. Why is that a really good thing? Well, the reason it is it allows us to leverage kind of a technology or a term called orchestration. And orchestration really is how are we going to put things together to solve for our particular needs? So, in the case of Broadridge, our Communications Cloud includes eight or nine different things that need to happen. But it's flexible in that each of those steps, we may have multiple tools to solve for that particular step because the needs of one client may not necessarily match the needs of another client. It's also scalable in that clients may ask us to integrate with other services and other sources as we pull in data or to connect to other platforms, and that's okay.

So, I think at the core of a good communications platform to support a robust communication strategy is an open platform, right? And just to give you kind of an overview, what does our open platform include? It includes a variety of ways to get content in, right? Not just batch files, but in API where someone can trigger the generation of a communication. It creates different tools to compose that experience based upon the preferences of the individual. So, the need to compose a document or compose an email, or an SMS message, maybe an interactive microsite that brings the information to life. The idea that we can compose that using simple tools that are drag and drop and allow individuals to be able to quickly make changes on the business side versus making entire technical rebuild. The ability to store all that information for regulatory purposes or for information management purposes, to deliver it out to a host of different channels, physical channels, electronic channels, emerging digital channels. And then I would say the most important point of our Communications Cloud and really anyone's communication strategy in general is robust analytical capabilities. So much of what we've learned over the last 10 or 15 years of digital has been on the desire and the need to be agile and responsive to data that we're collecting. On the marketing side, organizations have done an unbelievable job. We mapped out entire user journeys, we know what next best actions are to get consumers to take that next step. On the communication side, specifically this transactional communication side, bills and statements, we don't apply a lot of those techniques. We don't change the experience based upon what we learn. That has to stop. So, the ability to really understand what's working and what's not, what's driving engagement, what's driving digital adoption, what messages work better than other messages have never been so important. And then using that data to not iterate the experience once a year, but to iterate the experience every month, iterate the experience after every communication so that we're delivering communications that are engaging and responsive to the individual who's receiving them, which drives a huge amount of value for the organizations that send them.

Matt: Rob, let's talk about regulations. And as you know, there've been a lot of discussions about clients wanting regulators to allow paper-based communications to be delivered digitally. Talk to me about your thoughts on the topic and some of the discussions that you've been having with regulatory bodies as well.

Rob: Yeah, there's a lot of conversations going on about this and really across I think every single industry and all the different regulators that provide, there's a desire by a lot of organizations to really think about is the timing right to switch the default option from a physical communication to electronic communication? And, I've been involved in a lot of these dialogues with a variety of different regulators and industry groups. And one of the points that I always bring up is this, we'll go back to the experience word, is if you're going to do things such as this, really focus on the experience. Because if you don't do them together, you're going to leave the individual either ill-informed or wanting more. And when you speak to regulators, you learn that's their primary goal. They want to ensure that the public has the proper protections and the proper understanding about what's happening in their various accounts.

And so, I believe as an organization, we feel that the proper way to achieve these goals is to lead with a message that's not based upon any operational efficiencies and based upon the cost savings that could be realized. It's based upon the improved experience that could be delivered to the particular consumer we're talking about. Whether that's an investor, whether it's a banking customer, whether it's a patient, doesn't really matter, it should all be about experience. And the goal of organizations and the goal of industry parties should be able to demonstrate that digital provides an opportunity to better service and educate our clients. And where that really starts with is data, right? Communications are largely driven by data and unlocking that data so that it can be presented to people in a variety of different ways, through a variety of different channels. Because I still think there's a lot of people that think about digital delivery as an email. And email, there's no doubt that that is one channel for digital delivery, but there is push notifications, there's SMS messaging. But then there's emerging channels, video, audio channels, all of these things can play the part of helping to drive a digital conversation, but all of them require really, really robust data. I think then from the regulator perspective, what they have to be careful not to do is to create regulations that are based upon today's channels and today's technology. They need to create things that are future-proof, right? And from my perspective, what that typically comes down to is separating out data and experience. Data is what you're required to send to someone, experience is how they present it. Those two things are separate, and they should be thought of that way because it's when they come together that you deliver the best possible experience and the experience that's going to be responsive to one channel may be very different for another channel. The security that's available in one channel may be very different from another channel. That doesn't mean that they shouldn't be used. They should all be used, but they should be used in a way that's most effective to that channel.

Matt: I think the interesting thing is while your talk track there is around the regulatory side, we have similar discussions with clients that are asking us to help them transform experiences, but they haven't put in the work to break down the data silos internally. They can't speak to the client with a single view of client or customer because they haven't done the baseline technology, people and process work that's required to be able to deliver on that experience.

Rob: I think sometimes they overcomplicate it. You know, it's not that every system needs to be integrated beneath the covers. It's that you need to have an understanding of who your clients are and a single identifier that can...or maybe multiple identifiers. Each platform can have their own identifiers, but you need a way of bringing that information together and that focus on identity and recognizing that someone is my customer across multiple lines of business. If you can do that effectively, the experience that you can deliver can really be superior because it shows that you understand things, right?

Matt: Rob, thanks so much for taking some time to discuss the market. Always great to have you on.

Rob: Thanks for having me, looking forward to our next conversation already.

Matt: Sounds great.

I'm Matt Swain, and you've been listening to the "Reimagining Communications" podcast. If you like this episode and think someone else would too, please share it, leave a review, and don't forget to subscribe. And if you're ready to reimagine customer experiences, consider the Broadridge Communications Cloud, an end to end platform for creating, delivering, and managing omnichannel communications and customer engagement. To learn more about Broadridge, our insights, and our innovations, visit or find us on Twitter and LinkedIn.

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