Recent advancements in wealth management technology have disrupted the whole wealth management industry.
Even though the financial services industry has long been affected by technological advancements and disruption, many FinTech technologies have been hesitant to penetrate the lucrative wealth management market.
Due to the numerous stakeholders in the wealth management sector, we are aware that the market is considerably larger than merely advisers.
So, let’s take a broader look and explore some of the industry’s current trends that you should be aware of.
One of the largest developments in the field is Re-Platforming, which is also known as “upgrading.” Re-platforming is merely an upgrade that entails swapping out your platform’s outdated IT technologies for more recent ones.
Given how long it takes to implement new systems, this upgrade is crucial, and making these updates is important since it will affect your customers and how you interact with your provider.
Re-platforming or upgrading may be a laborious process that requires years to complete before you reach your desired level, but the results are rewarding.
2. Limiting Compliance Cost
The regulatory compliance reporting process may be simplified to a large extent by technology. As a consequence of continuous changes, businesses and professionals are increasingly using affordable solutions that streamline operational processes.
Partnerships with solution providers are anticipated to become essential for firms to quickly respond to changes in the regulatory landscape and to confidently fulfill regulatory requirements.
3. Regulatory Technology
Regulations may and usually do change. To ensure that it is always compliant, your business has to have a strong compliance system in place.
RegTech tools may assist your wealth management business cut costs on fines, manpower, and the cost of enacting new laws. In order to help your business with regulatory compliance, choose a RegTech solution.
Regulation technology is a significant development that wealth management professionals need to be aware of. Companies spend a lot of money each year dealing with compliance concerns, even if it’s simply making sure that you are being compliant.
RegTech reduces compliance-related problems while improving the effectiveness and efficiency of the whole compliance process.
It might be interesting to read about Challenges in the Wealth Management Industry and How can Tech Reshape it
4. Agile Distribution
Professionals in wealth management have turned their attention from goods to customer service. Companies are increasingly making substantial use of automation and insight-based solutions.
With the use of this technology, businesses may respond to customer expectations for individualized services and market developments.
The main goal of agile distribution is to enable next-generation capabilities by changing a company’s service delivery paradigm to one that is based on agile principles.
From a regulatory and operational standpoint, technologies like cloud computing, big data, APIs, and artificial intelligence allow businesses to adapt without having to implement whole new systems that are unable to match the shifting demands.
In other words, agile distribution refers to contemporary technology that is quick to respond to changes in operational, legal, and customer demand without requiring the implementation of new technology or specialized development effort.
This eventually makes it simpler to service clients and increase efficiency, enabling businesses to respond to changing client requests more quickly.
Know more about how Indium can help enhance your business potential with customized digital solutions.
5. Use of Virtual Tools
Numerous changes in wealth management are undoubtedly being driven by technology advancements in the sector.
Despite the industry’s past reluctance to accept new technology, developing tools provide fantastic opportunity for businesses to increase their bottom line.
By assisting customers with frequent, automated reports of their assets, virtual tools can free up advisors’ time so they can concentrate on finding new clients and giving advice. Additionally, automating numerous customer contacts eases financial strains.
By facilitating data-driven judgments, virtual tools might also encourage investors to modify their behavior. And by proposing actions for customers, tools like next-best-action engines may assist advisers in streamlining their roles and duties.
6. Internet of Things
Despite the widespread use of Internet of Things (IoT) technology, the wealth management industry has been slower than others to do so. The time has arrived to start making future plans and offering your clients better product choices.
For asset managers, IoT devices open up new data sources, but capturing real-time spending and saving data does more than just allow them to give more tailored solutions.
Furthermore, it assists clients in discovering areas of their lifestyle that they might not have been consciously aware of.
IoT technology is typically employed for practical tasks like monitoring a client’s assets, but it may also be applied to improve operational efficiency, satisfy customers, and make products more affordable.
7. Augmented and Virtual Reality
Tools like augmented reality and virtual reality are excellent for helping wealth managers connect with the younger customers who are beginning to take over the industry.
These innovative technologies not only assist in luring in younger consumers, but they also aid in educating them about the advantages of wealth management in a way that is more engaging and simpler to comprehend.
Long-term success will depend on how well a wealth management company can explain the value of their service to younger clients who may not be familiar with the services they offer.
AR and VR will be instrumental in helping forward-thinking organizations communicate with and educate their potential clients, which is something that wealth management firms must be creative about.
The most intriguing and promising technological advancements now in development are augmented reality (AR) and virtual reality (VR).
Despite the fact that it can appear like AR and VR have no role in wealth management, that is just untrue.
8. Machine Learning to Correct Bias Decisions
One of the pillars of wealth management is decision making. Even the most seasoned wealth managers are prone to making biased decisions.
This is unarguably why a wide range of sectors and companies have adopted the use of machine learning and found it to be profound.
The accuracy of the predictions made by machine learning techniques will increase with the amount of data you provide.
Successful wealth management companies can recognize when emotion or intuition is driving a trade and make rational change as a consequence.
The fact that the bulk of high-net-worth individuals are older and accustomed to conducting business in a particular way is perhaps the main reason why the wealth management sector has lagged behind the financial services sector overall.
On the other hand, you may be confident that you’ve done a fantastic job based on worldwide benchmarks thanks to these technological advancements.
How can Indium help
We at Indium, can –
- Automate wealth management workflow thus integrating front office, middle office, sales, and back-office functions.
- Our award winning Tex.ai can be used to extract insights from various sources, thereby helping financial institutions create customized products and services and focused promotions to improve conversions and enhance overall customer experience.
- By leveraging our cloud solutions financial institutions can modernize their infrastructure, meet rapidly changing customer behaviours and expectations, and drive business growth.