3 Impacts of Data Analytics on Wealth Management
capitalmarketsciooutlook

3 Impacts of Data Analytics on Wealth Management

By Capital Markets CIO Outlook | Monday, November 04, 2019

Advanced data analytics is essential incorporation in wealth management that enables clarity in decision-making with an increased sense of data comprehension.    

FREMONT, CA: The wealth management sector is transforming at a rapid pace. Investors are increasingly getting apprehensive of their decision-making and adopting technologies to aid them. For the advisors, the situation is becoming even more challenging as they are under pressure to deliver insights into superior investment performance for their clients amidst an increased level of uncertainty and risk. Data analytics is useful incorporation when it comes to achieving clarity in investment decision-making and risk management. Investors and advisors have realized the essence of data analytics and are increasingly spending on equipping themselves with advanced data analytics solutions.

 Advanced analytics methods are backed by the latest innovations, such as machine learning (ML) and big data. The technologies are also shaping research and understanding of data-driven trends in investments. According to a survey, 86 percent of the respondents are increasingly spending on data and analytics for the past three years. Here are some of the areas where data and analytics will influence the key aspects of wealth management.     

Process Automation

The wealth management firms are moving towards automated solutions that allow them to utilize their human resources productively. Thus, the firms are using technologies such as natural language processing (NLP) and other methods to analyze voice and text data to increase the efficiency of basic functions. However, data analytics can have a significant contribution to this above cause as the historical, unstructured data sets can be utilized to eliminate any possible roadblocks encountered during the automation phase.

Integrated Analytics Platform

An integrated data analytics solution that derives insights from structured, as well as unstructured data sources, can be applied to meet decision-making challenges. The deployment must be requirement specific for an advisor or a particular firm, covering all the essential business needs.

 Risk Management

Wealth management firms are constantly striving to expand their digital footprints. However, with an increased digital footprint, the risk profiles change and make the firm vulnerable to new risk zones. Data analytics can be effectively used to track and counter emerging risk zones. For instance, Robotic process automation (RPA) can be utilized for compliance, and internal audit checks and balances.  

 Thus, data analytics offers a new set of opportunities for the wealth management firms and asset managers to address the growing complexities and vulnerabilities in the investment sector. An initial investment into data analytics solutions will offer immediate as well as long-term returns to the wealth managers and firms.

Weekly Brief