Technology’s evolving role in wealth management
Technology has always been at the core of how wealth managers do business. In the past, wealth managers have targeted most of their technology investments at the back office, driving efficiencies and cost reductions. In terms of how wealth managers are investing in technology, three developments are emerging:
- Ongoing standardization of core banking platforms. From a competitive perspective, the value of core banking technology and infrastructure is falling in significance. Core banking technologies are increasingly standardized and software providers are more plentiful. Many wealth managers are choosing to adopt standard solutions rather than to customize off-the-shelf solutions or even develop their own solutions.
- Consumer technologies crossing over into the enterprise. Client advisors require applications and tools that allow them to stay connected with their clients and productive at all times. To support the highly mobile workforce, corporate IT is expected to develop solutions that allow mobile access to front-end tools and other enterprise content.
- Major technology investment required to improve the client experience. Wealth clients use digital technology extensively in their personal lives and expect similar convenience and ease-of-use in solutions provided by their wealth managers. To satisfy these demands, wealth managers need to invest heavily in their front-end tools, both for client advisors and clients.
Digital technologies, in particular, are fundamentally transforming how wealth managers serve clients and conduct their business operations. Three digital technology discontinuities are converging:
- Mobile is developing into the preferred channel for clients across all wealth bands, owing to the “anytime, anywhere” and context-aware capabilities that mobile devices offer.
- Social media and collaboration tools provide wealth clients the ability to interact with peers on portfolio strategies and client advisor performance.
- Through advanced analytics, wealth managers can improve insight generation and decision-making by infusing data into all aspects around revenue generation, cost control and risk mitigation.
The combination of these three digital technologies will fundamentally shape client value propositions and operating models of wealth managers in the years to come. Read the full article to find out the full implications plus how, in order to address the rapid convergence of digital technologies, leading wealth managers are building transformational programs centered around two themes:
- Harnessing digital technologies to engage with clients in new ways, enabling new revenue opportunities and reducing cost-to-serve.
- Leveraging analytics tools and technologies to generate new levels of insight, improve decision-making and establish new business opportunities.
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