COVID-19 renews impetus to fix legacy technology and get digital engagement right

In the early, Brexit focused days of 2020, many wealth managers were struggling to keep pace with technological change, amid the heavy burden of regulation and economic uncertainty. In an article I wrote at that time, I spoke of the need for more agile and integrated infrastructures and solutions that safeguard business growth.

Fast forward a few months… Following weeks of unforeseen and unprecedented market volatility and uncertainty every financial institution – everywhere in the world – is now looking ahead and trying to second guess the next phase of the economic ‘wheel of fortune’. For wealth managers and investors, sharp contractions in global economies will put further pressure on fee income derived from portfolio valuations, and expectations around stock returns for the future will need to be scaled back significantly.

After the shock of a very weak first quarter, equity markets have rebounded sharply, driven by a combination of huge monetary and fiscal support and better news on the COVID-19 pandemic.  Wealth managers are now preparing for what comes next, reviewing the technological implications, and setting priorities to ensure they can accommodate whatever our new normal will be.

Agility, communication, and integration are now more important than ever before.

Top 4 technological priorities

  1. Upgrade legacy systems and optimise associated target operating models. Many wealth managers have been counting the cost of legacy technology that is fragmented and inflexible. Reliance on disparate systems and unconnected processes, resulting in insufficient access to complete client data, has highlighted systemic deficiencies. Those who were behind the curve in their deployment of secure and scalable cloud-based infrastructures pre-COVID have experienced business continuity challenges and should now accelerate their migration to the Cloud. While the industry watches with interest to see how AWS, IBM, Google, Microsoft and others manage capacity while under stress, legacy alternatives have proved difficult to maintain remotely and in many cases have been a root cause of poor client service, which is untenable for wealth managers moving forwards.
  2. Accelerate digitisation. Before COVID-19, few wealth managers would have believed that remote working at scale, for extended periods of time, was viable. Some have learnt the hard way that lack of digitisation and intelligent automation can significantly impact their ability to communicate effectively with clients. Others have proved that remote working is entirely possible, without degradation to the quality of service. Secure and fully-auditable multi-channel collaboration tools like Microsoft Teams – which has grown from 32 million daily active users to 44 million due to COVID-19 – have enabled wealth management teams to manage internal communications and projects very efficiently. And those with messaging platform integration have been able to communicate securely and compliantly with clients via popular apps, such as WhatsApp, WeChat and Viber.Ensuring easy and compliant access to digital communications tools will remain a top priority moving forwards.
  3. Unlock the power of data. Months of operating reactively are now being replaced by a future-oriented outlook. Accurate and timely management of information has proven to be a differentiator for wealth managers. Those equipped with the tools to access client data quickly and easily, view it holistically and gain insights that enable them to make best recommendations at the right time, are seeing profitable outcomes. Even those who have been skeptical about artificial intelligence in the past are coming to realise its importance in enabling advisors to quickly analyse and then respond to clients’ sentiments and requirements in turbulent markets.
  4. Get to grips with compliance. While there has been no significant change in regulatory obligations as wealth managers navigate the COVID-19 storm, new challenges have arisen through remote-working. Those who are faring best are those who have connected systems and processes, which ensure organisation-wide compliance throughout the client lifecycle. With many firms indicating the intent to introduce permanent home-working, for at least a portion of is staff, the importance of having systems and processes with compliance built-in, and creating a frictionless data collection process for clients throughout onboarding, is especially important.

In short, COVID-19 has not altered technological priorities in wealth management, however the need to get projects on track and progress them rapidly to stay connected with clients, support business continuity and avoid revenue loss in the future, has never been greater.


social media button

Find me on LinkedIn


Dispelling the Myths Surrounding Hybrid Servicing in Wealth Management

27 March 2023

Dispelling the Myths Surrounding Hybrid Servicing in Wealth Management

Traditional Wealth Management firms and Private Banks may think that human service will confer a point of difference in time. However, they could be standing on a burning bridge. There are some very compelling reasons for adopting AI technology and automation within your service model, and in time, protecting profitability will likely force action.

3 min. read

The compliance advantages of hybrid servicing

23 March 2023

The compliance advantages of hybrid servicing

There may be many ways in which a wealth management business ensures the digital functionality of its hybrid model is compliant. In this article, we will focus on three features that should be embedded in the hybrid model solution to ensure greater compliance with regulatory requirements.

3 min. read

Is Hybrid Servicing the next big thing in WealthTech?

15 March 2023

Is Hybrid Servicing the next big thing in WealthTech?

A Hybrid Servicing model is central to the future of wealth management. Its growing popularity has been driven by a more digitally adept population, and a younger demographic of HNW and UHNW investors impacting the current benchmarks for client servicing and accessibility to financial data.

3 min. read

Sign up to our Newsletter

NEW - eBook: How Hybrid Servicing Can Transform Your Wealth Management Firm

At Wealth Dynamix, we believe a hybrid client servicing model offers the optimal solution – it is efficient, effective, and can support compliance.  

Client Onboarding