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Produced by:
Subhanko Basu
Managing Principal, CAPCO
A great digital offering gives users easy access to their savings and investments data, and is an enjoyable experience.
What has led to the significant increase in software spending within wealth management?
In recent years, there has been a significant increase in the adoption of digital wealth management tools. This is partly due to the global pandemic, but the change was happening even before COVID. The democratisation within retail wealth management has occurred because there is now a large pool of people who are financially confident to manage their own savings and investments, actively seeking out digital tools to do so. This has led to a number of challenger brands appearing and also forced the larger, more traditional wealth management firms to strengthen their digital offerings.
A great digital offering gives users easy access to their savings and investments data, and is an enjoyable experience. To achieve this, businesses need to invest in the best people across technology, development, and design. Unsurprisingly, these people also need access to specialist software. So as more emphasis is placed on digital technologies in wealth management, software spend is only likely to increase.
What are the main challenges facing the wealth management sector over the next 18 months?
There will be three main challenges for businesses within wealth management. The first is the rise of digital technology as we talked about before. Executives have seen that with the right tools and support, anybody can adopt digital technology, so they are keen to accelerate the adoption. This feeds into the second challenge, which is moving data and analytics to the cloud, and maximising the value that data can bring. There has been a big realisation that companies have access to a treasure trove of data, but are not able to fully utilise it. The challenge is putting in place the right technology, processes and people to extract insights from the data. This takes time to get right, which is why businesses need to start the process now.
Finally, operating sustainably will continue to be a challenge. This is not exclusive to wealth management, but is becoming increasingly significant within society as a whole. Sustainability needs to be part of a business’ wider strategy and cascade down into day-to-day actions. We are already seeing clients challenge their providers if they are not happy with their approach to sustainability.
There has been a big realisation that companies have access to a treasure trove of data, but are not able to fully utilise it.
Human interaction and client relationships are still of huge importance to many people.
Should wealth management firms adopt a 100% digital approach?
Adopting a 100% digital approach to client management may not be right for every company within wealth management. Human interaction and client relationships are still of huge importance to many people. This is where a hybrid approach makes sense. As an example, many people are comfortable conducting their own research digitally these days, but often need final validation through a conversation with somebody. A hybrid approach also gives wealth management firms the opportunity to work smarter and actually make lives easier for their clients. Instead of sending out a traditional paper form in the post, they can now email the form as a PDF. This speeds up the process and requires less input from the client. The most exciting thing is that these technologies are evolving all the time, which makes life even easier for clients and perhaps most importantly, gives client managers in wealth management more time to focus on relationship building and human interaction.
About CAPCO
Capco is a global technology and management consultancy specialising in driving digital transformation in the financial services industry. Capco operates at the intersection of business and technology by combining innovative thinking with unrivalled industry knowledge to deliver end-to-end data-driven solutions and fast-track digital initiatives for banking and payments, capital markets, wealth and asset management, insurance, and the energy sector.
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Assured Thought is a quality assurance and software testing company for financial services firms in the UK, Europe and beyond.
With the right QA testing strategy, access to the right tools and resources, and the support of high performance specialists, you can accelerate the growth of your business and reap the rewards in a complex world.
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