Digital Platforms Empower Investors through Control, Convenience and Confidence

The march to conduct business online is picking up its pace as financial companies boost their security measures and make it easier for customers to get things done quickly and efficiently.

A successful woman holds a cellphone in front of an office building.
(Image credit: Getty Images)

The pandemic may have changed how we use technology, and ultimately how we manage our finances.

Throughout the pandemic, people increasingly relied on digital platforms, such as websites, apps and videoconferencing tools, for work and personal activities. At the same time, organizations improved their online customer experiences by embedding new technologies, making investments, and accelerating enhancements to respond to increased digital traffic. These advances often came with the goal of nudging people’s everyday choices and behaviors as well as improving consumer decision-making.

It appears to be working. Companies are interacting with customers through digital channels more than ever. In fact, in the U.S. 65% of customer interactions were digital in nature in July 2020, up from just 41% in December 2019, according to McKinsey research. It would have taken three years to see this increase under prior digital adoption rates.

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Interactions with financial companies were no exception. In a recent survey of U.S. investors, Vanguard found that digital engagement for completing financial activities is strong. Roughly 70% of respondents reported they are comfortable conducting financial business online, and more than half (53%) are comfortable doing most of their investing online. Further, 60% of respondents prefer conducting financial activities online over other methods, such as in-person transactions and phoning customer service.

Survey participants cite a plethora of benefits to engaging with their money digitally, which primarily boil down to a sense of control and the ability to save time. Specifically, investors cited saving time (81%), the ability to conduct financial business at any time (75%), and faster access to their money (67%) as reasons investors prefer digital engagement.

Advantages such as the ability to transact business in real-time and broad accessibility of online financial websites allow people to take many financial interactions into their own hands. More control (47%) and more responsiveness (38%) also ranked among the top benefits of digital engagement. Whether simply checking the performance of specific stocks or interacting with their 401(k) investments, empowered by technology, individuals can interact with their money when and how they want, without always needing to rely on human support.

Hurdles to Digital Adoption

While more investors are gaining comfort with taking their investing experience fully online, Vanguard’s survey revealed that some respondents are still uncertain about engaging with their financial services firms digitally. According to the survey, security concerns are the biggest reason investors would not conduct financial activity online, regardless of overall comfort with their financial firms’ digital platforms. Accordingly, safeguarding data remains a critical area of focus for many organizations, particularly financial services companies that continue to accelerate already sophisticated security measures.

Results indicate that nearly two in every five investors are not comfortable conducting financial business online, and roughly the same percentage of respondents are not comfortable doing most of their investing online. Following security, investors cited confusion (22%) about the platform as the next most common reason that they avoid doing their finances online.

How to Gain Digital Confidence

As investors’ digital adoption and engagement rose, financial services companies accelerated – and continue to accelerate – enhancements to their online experiences and mobile apps. Investors hesitant to embrace digital platforms should explore the advances in security offerings made by their financial services firms. Not only will individuals benefit from the upsides enjoyed by their digital-leaning peers, but they’ll also see how websites and apps have moved the needle on security and navigation. For instance, many sites and mobile apps now offer more secure methods of account access using a mobile device’s facial or fingerprint recognition feature. In addition, more modern interfaces provide convenience for uploading documents, feature intuitive search functions, offer visualizations of account performance and trends, and enable sophisticated digital client service.

Investors will continue to see an evolution toward digital empowerment. Many enhancements financial services firms make reflect efforts to empower investors by giving them greater control, saving them time, and addressing the major concerns that surfaced in the Vanguard survey. From “unseen” improvements in technology infrastructure, to tools investors can interact with to optimize personal portfolios and maximize long-term outcomes, the prevailing result is an elevated, reliable and more robust user experience.

Whether fully on board with digital engagement or still a little hesitant, investors can and should expect increasing control, convenience, and confidence when it comes to managing their finances in a digital environment. And while live human support will continue to play an important role for more complex financial issues, online and mobile engagement can streamline the majority of investors’ financial activities.

Over time, as digital enablement evolves even further, investors can expect prompts for better investment behaviors, improved investment outcomes, and greater confidence in their financial futures.


This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Marco De Freitas is a principal and Retail head of CX and Digital in Vanguard's Retail Investor Group. De Freitas leads Retail CX strategy and its efforts to reimagine end-to-end client journeys across channels. He leads cross-functional teams of product owners, UX, analysts, and engineers focused on transforming Vanguard’s client experience, driving loyalty and creating value. He holds Series 7, 24, 63, and 66 licenses.