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.
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:
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:
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.
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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