Wealth management: an insight into the future

By Alara Basul | 2 December 2016

The International Customer Conference was recently held in Amsterdam, addressing the imperative changes in the wealth and finance management industry. GTNews discussed how wealth and investment managements firms should put more emphasis on digital platforms and incorporate innovative ideas to keep up with the pace of the fintech market.

The conference, organised by Objectway, discussed the shift of the fintech market and how changes to the infrastructure and digitalising wealth management will shape the future of the industry. Objectway continue to grow their client database and wealth management with a combination of organic growth and acquisition of mid-sized clients. Since launching in 1990 as a wealth and investment management software vendor, the company has acquired clients from Europe, the Middle East and Africa.

Speaking to GTNews, Georgios Lekkas, chief product officer for Objectway, explained that customer experience “is the new competitive battlefield” for companies in the industry. Rather than meet advisors face-to-face, many prefer to communicate via email and video. He also expressed that introducing efficiencies across the spectrum of financial services, both easy and difficult tasks, are “crucial for digital advances”.

The wealth management sector has been a predominantly cottage industry. For years, the industry has adopted a traditional approach to client services and operations. Face-to-face communication is the typical method of wealth and investment management. Premium banking has always been the fundamental step to asset management. With the shift to the digital platform, trust needs to be the foundation that remains to keep a stable market. The more digitalisation comes into play, the more data circulation will be acquired; there needs to be a level of security in place to prevent cybercrime and a threat to the system.

Firms are also using analytics more than ever to undermine clients and their behaviour. There is a significant increase in internet-driven offerings to clients. In addition to analytics, there has also been an increase in social media use for customer interactions and engagements. Though the private banking sector in Europe still prefer to delegate wealth management in more traditional terms, American and Asian markets are increasingly willing to make investment decisions independently, with the help of digital platforms and social media to connect to new businesses.

Customers want to be able to be able to do everything online and the demand for investment advice is falling. Additionally, customers no longer trust financial service providers and want transparency,” adds Martin Dijkman, investment product manager at Dutch bank Rabobank.

Fintech services are expected to increase efficiency of services and diversify the financial market to increase competition. Companies and banks should benefit from planning digital initiatives and solutions, and should see digitalisation as an advantageous platform to initiate new clients and boost management services. The shift towards digitalism is a strategic step to take to shape the future of the fintech market, and a necessity approach for acquiring new clients and customers.

Guest speaker Chris Skinner, a fintech writer and blogger on thefinanser.com, stated that “wealth management is likely to have become irrelevant within the next 100 years”. 

According to conference speaker Stephen Wall, several traditional managers are dismissive of the shift to digital platforms, and that the traditional methods of wealth management will remain. However, ignoring the digital transformations would be a high risk.

Clients can move deeper into existing investment segments and enter new ones; advisers can be more efficient and engaging; the business can be more flexible, efficient and profitable,” Wall added.

A report by Strategy& found that only 22 of 50 private banks had optimised their websites to integrate smartphone applications — and 14 had no mobile presence at all.

Modern wealth management will place a greater emphasis on the clients, and there will be a more flexible model and infrastructure constructed over the new few years. Growing income for existing clients will also benefit the increasing stability of the market. Ignoring the shift towards digitalisation can be harmful to firms as clients are organically expecting banking and finance technology companies to incorporate and be updated with new platforms for their services.

By Alara Basul

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