Recognise the correlation between technology, costs and revenues to increase profitability

As focus shifts from business continuity to revenue growth wealth managers cannot delay digitising business-critical functions.


Every year, Wealth Dynamix CEO Gary Linieres asks the leadership team to reflect on the 12 months and share their number one piece of advice for wealth managers looking to gain an edge in the year ahead through their service offering. The post below is the response from Natalie Levine, Chief Technology Officer.

As focus shifts from business continuity to revenue growth wealth managers cannot delay digitising business-critical functions.

Entering 2020 wealth managers’ digital transformation efforts were progressing at wildly differing rates. At best, some had moved to cloud-based infrastructure and were putting plans in place to automate onboarding. At worst, many were struggling to keep pace with technological change amid the heavy burden of regulatory change and economic uncertainty.

Meanwhile, challenger firms – unencumbered by monolithic legacy systems that are costly, risky and difficult to integrate with anything – were stealing a march. By providing the kind of digital access and hyper-personalised service needed to secure AUM in the future, as the much anticipated great wealth transfer of $30 trillion in wealth from baby boomers to Millennials and Gen-X’ers kicks into action, they were already ahead of the game compared with longer established firms.

Beyond business continuity – what comes next?

Covid-19 has had a profound impact on technology adoption in wealth management. Business thinking switched from revenue growth to business continuity overnight. As firms reviewed their continuity plans, this is what they learned:

  • To safeguard profitability in times of crisis operating costs must be kept to a minimum.
  • The need for agility has never been greater, now and in the future, to adapt quickly to changes in business strategy and socio-economic conditions, quickly and cost-effectively.
  • Keeping connected with colleagues and clients, in a timely and relevant manner, is the key to client acquisition, retention and AUM growth.

How can wealth managers leverage this experience, to grow revenues in 2021 and beyond?

The pandemic forced digital transformation on an unprecedented scale in a very short period of time. While technology adoption has been advised by industry experts for many years it has taken a pandemic to get the technology message across, in an industry previously considered impermeable due to its reliance on face-to-face, personal interactions. 

“Wealth managers are now returning attention to revenue growth and accelerating plans to support advisors with technology that will enable more effective engagement with existing and prospective clients.”

In 2021, those who fail to digitise, unlock the power of client data, operate an agile technology infrastructure and keep pace with compliance updates will need to return to their business continuity plan sooner than expected and fail to meet growth goals. To be successful wealth managers must:

  • Eliminate onerous and costly manual processes, once and for all. By automating routine administrative processes across the client lifecycle and improving workflows between teams and departments, unnecessary costs are eliminated and resources can be directed towards client acquisition and retention.

The inefficiency of onboarding continues to be the source of most complaints from clients and advisors. By digitising onboarding and compliance processes, integrating best-in-class due diligence solutions such as e-Signature capture and verification, and capturing data once and re-using it throughout the end-to-end client journey, the entire function becomes more agile and less costly.

  • Further upgrade legacy systems and optimise operating models. No wealth manager can afford to be bound by historical decisions. From a technology perspective open APIs are the pre-requisite for quick and seamless integration with legacy systems. SaaS solutions are an option worth considering, especially for wealth managers with straightforward requirements who are keen to adopt out-of-the-box rather than customise new solutions. These wealth managers want to deploy rapidly with minimal effort, are looking for the ability to toggle functionality on and off as required and may want to be able to scale capacity up or down quickly.
  • Go beyond simply communicating and collaborating digitally. Clients now expect online collaboration to remain an option moving forwards. They are more concerned about the specific relevance and timely delivery of communications than their frequency. Wealth managers must get to grips with AI and advanced analytics so that data can be interrogated to provide intelligent, data-driven triggers that help advisors know what to communicate, when and how. AI will unlock your ability to deliver hyper-personalised communications to prospects, as well as clients, to increase engagement throughout the sales cycle.
  • Keep pace with compliance. Any mid-Covid reprieve in compliance requirements is only temporary. Regulators are already reverting to pre-Covid compliance requirements, as evidenced by a recent FCA statement on call recording. More new and updated regulation is anticipated, especially with many staff shifting permanently to remote working. As the volume and complexity of compliance rises wealth managers must build compliance into digital processes, to ensure that due diligence is conducted as required, and to make it as seamless and fast as possible.

Without doubt, 2020 was a tipping point for technology adoption in wealth management. Far from viewing it solely from an operational standpoint, executives now realise that technology – not only people – is pivotal in the race to gain revenues… and at long last the value in taking further technological steps forward to ensure revenue growth is now recognised.

This post is an extract from the e-book ‘5 ways wealth managers can get ahead in 2021’. Download the full e-book below.

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