Financial outfits operating wealth management funds that had long resisted the digital revolution are now reporting higher success rates, less human error, and better decision making, which of course all mean higher profits.
Many experts now believe the industry is on the cusp of a significant transformation through the complete digitalisation of out-dated methods and tasks used to manage wealth fund activities. And it is the companies, those that already succumbed to pressures to transform certain business areas to make use of innovative software solutions services, that are reportedly seeing the immediate efficiency benefits of digitalised tech designed to accelerate certain areas of the wealth management process.
Albeit the many benefits of digitalisation and AI in wealth management still pose a few major challenges for companies that are yet to take that final leap of faith and make that change. For an outsider, but a fan of moving into the digital sphere, this situation reminds me of the Michael Jackson song ‘Man in the Mirror’ with the words, ‘make that change’ resounding through the office floors of wealth management firms like south pass partners
At some point, change is inevitable, especially with the obvious success of competitors now using modern software-based solutions. Quite simply, wealth management firms yet to jump on the technology bandwagon will need to make the transition at some point to remain competitive.
For the very least, these firms will need to upgrade to hold on to talent working within their firms. I say this because there is every possibility of another more technologically advanced competitor head-hunting wealth managers by luring them in with software solutions that offer access to resources far quicker than their current firm can. This is on the pretence that faster flow of information means making more money, more educated decisions, and shorter investment turnaround times.
Although upgrading will not come without its challenges. Some of those challenges will include moving from a traditional product-selling approach to one that focuses on delivering value to clients. In addition, wealth managers will have to invest in more advanced tools and automation to provide a better service, for example:
RPA: Robotic process automation (RPA) is a promising solution for automating repetitive tasks. The technology reduces both the cost and the time required for each step of the process. In the wealth management industry, business process automation (BPA) is now the trending technological solution to increase efficiency. It involves transparent automation of business process activities, which can be categorised into front-office, middle-office, and back-office divisions.
Digital platforms: Incorporating digital platform technologies will allow wealth managers to integrate existing applications and third-party data providers into a single workflow. This will enhance client experience and give wealth managers more insight into their investments. The key to successful digital transformation is to embrace this technology and implement a data governance strategy that is focused on your business’s future.
In other words, wealth managers need to embrace the digital revolution to remain competitive and remain ahead of their competitors.
