How digitisation is certain to change wealth and asset management

We have long been warned that there are two certainties in life – death and taxes. However, as the technological revolution has unfolded, a new certainty has emerged: digitisation. This rang truer than ever at the PAM Digital Forum where over 60 representatives from the UK’s leading wealth and private banking firms discussed the findings of PAM’s third annual digital survey, supported by Wealth Dynamix.

The last few years have seen a continual uptake in digital strategies amongst wealth managers and private banks. This year showed that a clear majority of firms have embedded digital within their organisations, at 82.54% compared to 56.6% last year and just 36.4% in 2015, when the survey was first conducted. The findings point to an industry where the question is no longer whether wealth managers and private banks should embrace digital, but how they should do so.

A cohesive digital strategy centres on the client and transcends the breadth of an organisation. Digitisation can drive clear efficiencies, empower clients and advisers alike while playing a crucial role in ensuring compliance. We have seen a notable change in the way in which digital has been adopted across the industry, as Robert Roome, who spoke on the panel at the event. IT functions have transformed through the rise of digital. The businesses that have emerged as winners in the drive for digitally engage are those firms that have entrusted their people, integrated them from siloed ‘machine fixers’ to strategic business partners with a clear voice in their growth strategies.

Yet some corners of the industry have been slower than others to embrace digital – perhaps due to the misconception that this is an ‘all or nothing’ phenomena. But the juxtaposition of positive digital adoption is that it centres on people. It is about changing client and stakeholder behaviour and adopting the services they receive to meet their fast-moving expectations.

Culture is key to an organisation’s ability to embed a digital strategy. Clear vision and endorsement must come from the top and filter across the breadth of the organisation, allowing digital to underpin every aspect of the client journey and bought to life by the employees within. Moreover, the benefits of creating an embracing culture exceed digital – those businesses with the appetite to maximise this are typically quicker to innovate, more agile and able to adapt to change.

Wealth manager discussing on microphone working on digitisation

In an industry where wealth managers are viewed through the same lens as high-end consumer brands, digitisation has revolutionised the client experience in line with shifting client behaviours and expectation. It is clear through our work with wealth managers and private banks that successful digital strategies centre on choice. While the PAM survey showed that a very small minority of wealth managers expect clients to opt for a fully automated service in five years’ time, 96% expect they will still seek at least some human adviser interaction. And as clients engage and interact on multiple levels and across a range of channels, firms must make these available to them.

There was interesting discussion at the PAM event around on-boarding. The increasing popularity of robo advisers across affluent and some HNW circles has demonstrated the speed at which clients can be digitally on-boarded – a process that is known to be woefully slow in some of the most established organisations, draining resource and sometimes hindering the client relationship at the outset. But for some, personal situations, investment objectives and cross-border nuances can often be so complex that they outweigh the realms of automated on-boarding. And as one wealth manager advised, the opportunity to engage with the client through this process at the earliest stage of the relationship is invaluable in engendering trust. But digital plays a clear role in driving efficiencies, aiding due diligence and sanctions verification and setting the scene for a firm’s digital capabilities going forward. In an industry that built on relationships, it is clear that an on-boarding process that combines digital efficiencies with adviser engagement will be the most successful.

While the human touch will continue to underpin the delivery of advice, the survey found that the majority of wealth managers are using digital to engage with clients. The Forum allowed us to explore this in more detail, and when asked which platform is the most effective for engaging with clients, portals (71%) and mobile apps (48%) came out on top. While WhatsApp (29%) and social channels such as LinkedIn and Twitter (19%) are driving some engagement, this shows digital strategies working at their best, as providers are directing clients through their own channels – making it easy for clients to engage in real time, augmenting security and connectivity, and ensuring a consistent brand experience.

As the battle to serve the client in the fragmented and multi-banked wealth and private banking industry continues, so too does the pursuit for the value add that will set one firm ahead of another. With clients looking to their advisers to understand every aspect of their wealth, aggregation has the potential to elevate a firm to the role of lead adviser – if they have the portal functionality that can accommodate this data and provide the coveted bird’s eye view of a client’s full portfolio, across multiple providers.

With businesses facing cost and margin challenges, many have prioritised investment in innovation. The survey showed that intermediaries are the losers within this increasingly digitally powered world, with just a small minority of firms investing in digital intermediary on-boarding capabilities – perhaps as a nod to the typically paper-driven processes within their respective professions. Yet the astute wealth managers are prioritising their focus on data – investing in the tools and dashboards through which they can understand client drivers, return on investment and routes for growth. Feedback loops allow for on-going evaluation which is key to a business’s sustained success, enabling firms to work smarter and secure trust in an easily disenfranchised market.

An organisation’s ability to embed a digital strategy has an undisputed impact on their success. New technologies are here to stay and the challenge for wealth managers and private banks is to prioritise and then embrace these changes – and implement them well. With chief executives taking increased personal accountability for protecting their clients, digital strategy is a mainstay on a boardroom agenda, but must be intrinsic in an organisation’s DNA in order for it to thrive in this new world.


Dominic Snell was previously an ex-Barclays Wealth employee and has 17+ years experience in CRM Strategy, business analysis and solution implementation.

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