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Realizing digital: Delivering wealth management in the digital era

Wealth managers and private banks are becoming much more strategic about digital. Many are starting to think more clearly about how digital empowers the advisor and the client of the future. And everyone is starting to reassess the value that digital will deliver across the enterprise. CEOs Talk

A year ago, most — if not all — wealth management firms and private banks clearly recognized the value of digital. Yet only a slim majority (56 percent) possessed a formal digital strategy. And few  organizations were focusing their investments beyond delivering discrete solutions that tackled operational and client challenges such as onboarding, reporting and aggregation.

A new view on digital

Over the past year, however, it seems that wealth managers and private bankers have started to rethink their strategies and their overall approach to digital. In part, this is driven by a recognition that digital will have a transformational effect across the sector. In fact, according to a recent global survey of more than 70 investment management CEOs, 47 percent say they expect their organization to be transformed into a ‘significantly different entity’ within the next 3 years. The bank used to view digital as something that was unique to the various businesses, but now they understand that it is a core part of

the overall business strategy. Today, the bank sees digital as an enabler that will improve business at an accelerated rate. There is an ever-increasing level of awareness about the value of digital in the wealth management space,” noted an interviewee from one large US-based global private bank. Our conversations with wealth management leaders suggest that organizations are starting to move from a focus on ‘point solutions’ to instead view digital as a broad enterprise strategy. As the Asia leader for one large global bank noted, “We realize that we can’t just offer robo solutions without a far broader view of how digital influences our multi-channel options. What is clear is that digital is here to stay but if we don’t invest strategically, we may not be here to stay.”

Focus on the client

In particular, our interviews suggest that wealth managers are now starting to use the digital agenda to enable a more holistic view of the end-client. Many are now starting to talk strategically about providing ‘omni-channel’ access, using digital investments to improve integration between advisors, channels and clients. The more strategic are using their digital agenda to identify emerging service demands that can be addressed through new capabilities. We see digital as a way to transform the client experience and channels, replacing the existing model with an omni-channel model. We want to give the client the tools to engage with us when and how they need and want,” said one executive from an Asia-based domestic bank.

Drive for efficiency

Our research also shows that wealth managers are reassessing the role of digital within the middle and back office. Indeed, around the world (albeit with greater ambition in North America), wealth managers and private bankers are starting to think more clearly about how they leverage digital capabilities and tools to streamline processes, improve data access and manage risks. One of our main goals for our digitalization program is to deliver more standardized global systems and processes. Ultimately, we hope to develop a single platform and find one tool for all our locations. There is a huge effort underway to standardize our infrastructure in order to be able to deliver one consistent experience for our advisors,” noted one European based global bank.

Driving digital compliance

Perhaps not surprisingly, our interviews highlight the ongoing challenge managers face as they balance growth ambitions against risk management, particularly with regards to regulation. “We recognize that we are a big organization and that we move slowly. At the end of the day, we are handling other people’s money and managing stiff regulatory requirements and that is not something you can do confidently at startup speed,” noted one European wealth management executive. However, our experience suggests that — while risk considerations must remain front and center — digitalization can help private banks and wealth management organizations reduce regulatory risk and improve overall compliance. For example, our global survey

of investment management CEOs shows that more than half (51 percent) are already using predictive analytics to improve their risk management. And a growing number are starting to use audio and electronic surveillance technologies to improve compliance.

For further reading, please download Realising Digital


David Okwara

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