THANK YOU FOR SUBSCRIBING
Capitalmarkets CIO Outlook Weekly Brief
Be first to read the latest tech news, Industry Leader's Insights, and CIO interviews of medium and large enterprises exclusively from Capitalmarkets CIO Outlook
Met with an evolving market, fierce competition, and emerging innovations that are shaking up the industry, wealth management firms understand that how they react to the digital wave will determine their long-term survival and performance.
Fremont, CA: Although the wealth management industry agrees on the importance of digital innovation, few businesses are able to derive any market benefit from their transformation efforts. This is because most wealth management companies approach digital transformation as a feature selection exercise, introducing stop-gap strategies to meet a pressing need to stay competitive or keep up with market trends. As such,
businesses are left with basic, disconnected, and inadequate digital capabilities to meet their clients' needs.
Here are the four digital transformation issues facing wealth management firms:
Disparate Data Sources
Since information is stored in separate silos that hinder data movement, these static legacy structures exacerbate the issue of different data sources. This prevents the 360-degree customer view needed to provide the contextualized, personalized services that the market now demands. It can be difficult — if not impossible — to track down specific client data as it is spread through various systems, file cabinets, and email inboxes. Because of the sensitive nature of this information, disparate systems pose a serious risk of non-compliance, mainly if processes include email-based approvals.
Strict Legacy Systems
Technology is, without a doubt, the most significant digital transformation problem for wealth management. The majority of service providers have rigid legacy processes that are introduced piecemeal to fix specific issues rather than as part of a comprehensive transition.
In certain cases, companies expand on these core frameworks to support emerging market trends, including mobile and social media, resulting in a challenge to keep their mobile applications up to date or connect their smartphone, tablet, and online banking experiences.
Check Out This: Nascent Technology
Risk-Averse Culture
Most businesses recognize the importance of digital innovation, but it must begin with the leaders and CEOs. Many wealth managers still see IT as a function that simply supports their core business rather than a central business strategy, which is understandable in a risk-averse industry like wealth management. The industry's low tech literacy — only 25 percent of wealth managers deliver digital platforms other than email — contrasts sharply with clients' digital habits.
Tiring Administrative Tasks
Wealth and relationship managers usually handle administrative activities such as account openings, deposits, and payments in addition to obtaining and servicing clients. Client onboarding that uses paper forms is inconvenient and frustrating, requiring repetitive data entry and a lot of paperwork.
See Also: Business Management Review
Read Also
