The emergence of a mass affluent segment, which includes individuals holding $60,000 to $500,000 in onshore liquid assets, including cash and deposits, equities, bonds and unit trusts, is fueling growth in new services and distribution options. This will require a more sophisticated approach to technology. Wealth managers, private bankers and retail banks are no longer talking of standalone strategies for wealthy individuals. The trend is towards ‘integrated financial solutions,’ revolving around cross-selling banking, savings, and investment products that come complete with advice.
Front- and middle-office technology becomes a competitive differentiator
Effective front- and middle-office tools, such as portfolio management, financial planning and analytical customer relationship management (CRM) systems, lie at the heart of wealth management operations. Clients, particularly the more active ‘new money’ segment, are demanding a more hands-on approach from their relationship managers. This creates a need for advisors and front-office staff to have access to more agile, automated analytical tools and presence technologies that enable client interactions to be more effective from both a cost and a time perspective.
As wealth managers seek greater competitive differentiation, they will look to develop an ‘ideal’ service model. The ‘ultimate offering’ is an idealized wealth management offering and should be viewed as prototype based on worldwide offerings. It is an architecture comprised of seamlessly interconnected, service oriented architecture (SOA)-enabled components combined with underlying business intelligence (BI) and analytical CRM components. It is emerging as the IT model in wealth management.
Well developed multi-channel features provide a foundation for effective distribution
A key priority within distribution channels will be the continuous delivery of high-quality face-to-face advice, while simultaneously providing customers with internet-based transactional capabilities. Retail banks looking to target this group are extending their offering beyond traditional retail banking services to include additional product building, stronger and multi-channel customer and advisor service options, and a deeper understanding of customer data.
Data management priorities are shifting to infrastructure and governance
Content from our partners
The presentation of data has always been among the top priorities of wealth managers as data reporting often determines whether a client will stay with the company. However, increasing pressure to reduce costs is causing focus to shift to back-office improvements, such as infrastructure and governance. As such, the combination of increasing competition, growing technological sophistication and an expanding mass affluent market is driving wealth managers to enhance their data management practices.
Wealth managers shift towards packaged core systems
Financial institutions are responding to the growing need for more automated and real-time back-office systems that are compliant with growing regulatory pressures. As a result, wealth mangers are turning to packaged core systems as a means of reaching these goals.
In order to align the existing technology stack with business needs, and to design, upgrade or develop componentized wealth management software platforms and IT infrastructure, understanding the ‘ultimate offering’ will be crucial for internal IT departments, as well as for technology vendors and integrators.
