How Multimedia Tools Made Vanguard A Better Company
Mutual fund company uses Web 2.0 technology to help customers invest better
CIO — Almost ten years ago Vanguard's IT team looked at then-emerging multimedia and content sharing tools on the Web and saw a future goldmine for customers.
The mutual fund company, which holds $1.3 trillion in assets, considers a key part of its value proposition to be educational materials that help customers make better investment choices. Multimedia offered yet another way to keep customers interested in and educated about the financial markets. Meanwhile, pushing content to subscribers' Web browsers could make Vanguard's content easier to access.
By 2006, online multimedia from iTunes to YouTube had exploded in popularity, RSS feeds for subscribing to Web content were proliferating and Vanguard plunged in. The company not only revamped its website, enabling customers to personalize their experience online, but also deployed a platform for delivering multimedia content. To date, Vanguard has posted 73 podcasts and 40 videos. For its efforts, Vanguard is honored with a 2008 CIO 100 Award.
It was an uncommon step for a financial services company, says CIO Paul Heller. He thinks that the materials, which have been downloaded by investors nearly 1 million times, have helped both the company and its customers weather the current economic downturn. Vanguard claims it led the mutual fund industry in cash flow in 2007 with more than $100 billion in new investments into its funds and its mutual fund redemption ratio (a measure showing how many dollars leave Vanguard) at an all-time record low. "I'm convinced that the positive part of this recession is that the technology can still enable people to invest," Heller says, and make them more successful by giving them information.
Photo By Steven Vote
Creating Wealth with Multimedia
Vanguard's 5 million customers are a tech-savvy bunch; most clients do their transactions online and have for years. "We were a virtual company before it was cool to be a virtual company," Heller says.
But investors weren't as enamored of the text-based information Vanguard had on its website. Heller and his team planned to give the customers what they wanted, where they wanted it. With the majority of Vanguard's interactions with clients occurring via Vanguard.com, Heller pays close attention to how consumers use the Web. "The trend towards Web 2.0 seemed obvious," he says of new technologies for sharing information and applications online.
