Enabling Digital Transformation


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Digital transformation has finally come for wealth management and brands must enable this process to create new revenue opportunities and meet customer expectations.

Customers will be expecting their wealth management brands to embrace digital. As large amounts of investible wealth are passed to younger generations, more and more of it is ending up in the hands of the digitally native — those people who have grown up alongside digital technology. However, some 80% of wealth management firms don't yet have a relationship with these demographics.

"An unprecedented transfer of wealth is expected to be served by a shrinking pool of advisers," said COO and UK MD of Nucoro, Nikolai Hack. "They will be dealing with a client base that is likely to need them to become more flexible and deliver a more modern and personal service. For the next generation, their needs and expectations are centered on interacting with their finances via digitally accessible platforms that link their money, their everyday lives and their goals to the future. Greater customization of service levels will also be key here."

This creates an arms race type situation. Those brands which successfully enable digital transformation will be the ones most likely to build meaningful relationships with these new wealth owners and secure their business for — hopefully — years to come.

First Steps

The problem with enabling digital transformation is that it can often be difficult to know where to start. With so many digital tools and exciting technologies available, the temptation to throw in everything but the IoT-enabled kitchen sink can be overwhelming.

However, the best place to begin is using something your wealth management firm probably already has a significant amount of lying around anyway — data. Sure, you could go all in with augmented reality, chatbots, and roboadvisors, but that would be akin to building a house without bothering to lay any foundations.

Data will allow for better business models, seamless customer experiences, robust regulatory reporting, and effective protection from cyber risks. Without data, there can be no investor insight, regulatory reporting, or investment analysis. Asset managers who invest heavily in data now will find that it makes every other aspect of digital transformation far simpler and more streamlined. In short, data underpins all the other technologies which are likely to form part of your digital transformation.

"As with any investment in a financial business, a central motivation should be to ultimately produce outcomes that can benefit customers," said Hack. "Adopting bolt-on enhancements like digital customer experiences or automations and data for back-office functions are the best routes to upgrading the services to existing and potential clients due to their accessibility, scalability, and affordability."

Data can help wealth management firms get a better understanding of their audience through more sophisticated customer personas and use that information to engage with them in a more personal and effective manner than ever before. Data can also help develop tools that use artificial intelligence to help wealth management brands navigate through the complex regulatory environment of their industry as well — boosting investment performance.


Data will help your wealth management brand automate many of its processes. From client onboarding to portfolio construction and billing automation, by letting digital technology handle the grunt work of wealth management, you free up more valuable time to engage with clients and ensure their needs are being served.

"For wealth managers, technology and digitization can be applied across all functions, from onboarding clients and portfolio management to operations and reporting," added Hack. "It also enables wealth managers to become much more agile and focused on the needs of clients. However, wealth managers need to find the right balance between digital and human services and the key to success will be how wealth managers combine these two in order to meet the challenges now and in the future."

Other applications of automation, especially in the context of artificial intelligence, is by deploying the aforementioned chatbots and roboadvisors. These platforms can process enormous volumes of information and provide clients with real-time investment advice and updates, as well as answering their frequently asked questions. The world of investment is incredibly fluid and fast moving, and digital technology can help clients keep pace with the rapidly shifting landscape.

Final Thoughts

Wealth management firms need to employ innovations such as automation and artificial intelligence as soon as possible. However, without the solid foundations data can provide, you could end up having to take the whole thing down and start over again.

Digital transformation is set to be a hot topic at Digital Wealth 2020, taking place in May at The Ritz-Carlton Fort Lauderdale, FL.

Download the agenda today for more information and insights.

WBR Insights is the custom research division of Worldwide Business Research (WBR). Our mission is to help inform and educate key stakeholders with research-based whitepapers, webinars, digital summits, and other thought-leadership assets while achieving our clients' strategic goals.

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