Digitalization of Wealth Management

Why wealth management can't afford to miss the digital wave?

A tectonic shift in wealth is sweeping throughout the world. Wealth is changing hands, migrating from the West to the East, from established economies to emerging ones, and from clients who reminisce about the pre-digital age to those who appreciate the rise of new-age technologies.

The need to remain competitive and meet evolving customer expectations, wealth management experts must implement strategies in order to service a client base that is defined by the digital divide.

Concurrently, they must adopt technologies that can help them achieve more.

In the wealth management industry, it is imperative for the players to maintain pace with new technologies and serve the next generation of customers.

Here, digitalization can have a large part to play. It can pave the way for increased automation and more relevant personalization while fostering a deeper understanding of client requirements and investments.

Artificial intelligence (AI), automation, and advanced analytics are likely to have the greatest impact on the wealth management universe in the future.

Changing Realities

The industry is at the center of revolutionary change: shifting demographics and the aging of not only advisors but also the baby boomer clients and the rise of a new generation of investors whose preferences and expectations have been shaped by new technologies and platforms and the fact that they lived through one of the worst recessions in history.

Companies such as Amazon, Uber, and Starbucks have embraced changes that resulted from customers experiencing a lack of convenience.

These companies took the risk of disrupting their businesses by shaking up the value chain based on customer centricity. This gave rise to innovation which, in turn, attracted new customers and ensured sustainable growth.

It’s now the time for wealth management firms to do the same.

Complexity Demands Innovation

A complex wealth management environment wrought about by regulations, globalization, low margins, outmoded infrastructure, and increasingly demanding customer expectations leading to losses in productivity and profitability has necessitated a digital makeover of organizations.

Digitalization is currently a top priority at client-facing companies and is affecting traditional modes of wealth management.

Improved CX as a Differentiator

There may not be a drastic change in how advisors deal with clients (telephones, face-to-face meetings, and e-mails) but there will be a shift from personal encounters to digitally enabled client interactions using social media and intelligent solutions.

The shift is inevitable. Wealth management industry clients are increasingly getting used to the experience offered by modern services and platforms. They expect communication nowadays to be seamless and not dependent on where they are.

Advisors, on the other hand, can tap social media or existing publicly available sources to improve their understanding of the customer.

HCL’s Expertise

HCL looks to transform the wealth management value chain with robust financial planning of services and solutions. The company has successfully executed several industry players, including containing costs to the tune of over $60 million by implementing financial planning tools for an Australian wealth manager.