Private Banking and Wealth Management industries have experienced a turbulent year. At the same time, with a new class of people looking to leverage their assets in investments—many of them for the first time—there is a growing need for professional financial advice.
According to Accenture survey, the C-level executives in wealth management participated, want to focus on responsible leadership and strategy, differentiated client experience, intelligent operations and technology, and empowered talent and change, by 2025. 40% admit that nurturing a strong culture for change and embracing new ways of working are challenges.
In the same survey, participants expect the following trends in wealth management to make their business more dynamic and offer greater value to their customers:
- The emergence of new technology
- Environmental considerations
- Hyper personalisation
- Move to value generation with support from technology
- personal data management
- Rise of platform ecosystems
WealthTech as the accelerator for optimised customer engagement
According to Finextra, prior to the pandemic, the wealth management sector was facing multifaceted challenges arising from digital disruption, evolving customer segments, and shifting competitive dynamics. The pandemic has merely acted as a reminder for the industry to revisit its priorities to appropriately tackle these challenges, and it has been successful in doing so by accelerating the adoption of tech and opening the door for WealthTech.
Client communication has been affected over the past year with technology being a pivotal element to rejuvenation. Interaction is expected to be a blend of remote and face to face using a range of digital tools.
Personalisation is becoming a key priority with data management holding a paradox to comply with the latest requirements and offer security and privacy whilst delivering services to match preferences. Again technology is the answer to address such concerns. The increase in partnerships provides further opportunities for wealth management firms to revisit their business models and to make them more flexible and forward-looking.
However, as mentioned in Nasdaq, the industry has been historically slow in changing from traditional infrastructure to more agile processes like microservices and self-service onboarding that would create more customer-driven communication.
Key points and takeaways
Given all this literature what should wealth management firms need to look out for this year and prepare for a more profitable and agile 2022?
1. Improve value proposition through ESG strategies
This may include diversity and ESG practices that also consider identifying alternative plans to invest while developing a long-term winning strategy based on specific trends and parameters to help overcome similar situations. The pandemic highlighted that many firms had to adjust to the market needs they trade in and be able to refresh quickly enough. In addition, new technology and new solutions allow investment managers to deliver strategic asset allocation and simultaneously incorporate investors’ ESG requirements, developing a significant competitive edge and secure a long-term market presence in this growing space.
2. Adopt omnichannel and personalised communication
Latest generation HNWIs have an increasing familiarity using mobile devices and digital channels. Focus on delivering a hyper personalization so as to offer advice on setting and meeting financial goals. Technology provides wealth managers with an array of opportunities to make the best and compliant use of customers’ data and spend more time enhancing their overall client service.
3. Utilise self-service onboarding and agile technology
Hybrid advice and customised reports enable firms to differentiate and offer to customers an intuitive experience, empowering rapid response to market changes and customer requests.
4. Invest in ground-breaking technology
IoT, Augmented reality and AI will enhance virtual meetings and best practices on client communication with automated functions where applicable, deliver operating cost reduction and improved customer experience.
5. Active presence through popular digital channels
Elaborate further on social media since customers tend to visit advisors’ profiles and check out experience, investing more on digitising the business profiles.
How Wealth Managers can step up their game
Technology will enable differentiated service delivery across the wealth bands with bespoke counseling (family office), dedicated discretionary investments and advanced advisory investments.
Cloud technology can replace aging in-house infrastructure and firms can leverage shared services to reduce middle office costs. Adopting advanced security could enable privacy, security and meet compliance concerns.
The above are not new to the industry but they have become a necessity to compete effectively.
Invest in elevating your technology and automation in communication to increase your clientele engagement.
It’s time you partnered with a firm that has developed and delivered innovation over the past years and helped firms experience the digital platform of investment during the pandemic with real value in their bottom line.