We define “technology” as the tools that deliver business value, achieve measurable goals and create the desired user experience. Defining a flexible architecture that enables a connected and integrated product ecosystem (with a strong data foundation and scalability enabled by the cloud) are fundamental factors for a successful transformation.
There are four broad categories of technology to consider:
1. Platform approach
Leveraging the capabilities of leading FinTech products can improve client experience, reduce time to market or build capability products to offer end-to-end services. Designing a platform that can provide access to multiple capability products under a common user experience can enable broader advisor outreach, increased adoption, and client retention. Creating a marketplace ecosystem of various capability products would allow wealth management firms to offer varied subscription levels for their platform.
Some organizations adopt vendor products, but significant customization often leads to a longer cycle time for upgrades, and end-users do not get timely benefits from the enhancements and innovations offered by these products. The next-gen platform design should balance between adopting a vendor product “as is” and customizing it.
2. Modern architectural patterns
Building a modern, open, and extensible technology architecture that can rapidly reconfigure and integrate new technologies helps to launch new business capabilities in quick cycles. Platforms can benefit from architectural patterns such as event-driven, plug-and-play, microservices, embedded analytics, and real-time insights – hosted on a scalable cloud infrastructure. A model wealth management platform demands a rich user experience, which is scalable and backed by a strong architectural foundation to enable easy integration with various products. Hence the focus should be on implementing a middleware solution that acts as an interoperability layer for integrating multiple products (in-house or vendor) into a cohesive product ecosystem that is fronted by a consolidated user experience layer and has security and compliance considerations at the core.
With modern architectural patterns in use, as the business evolves, wealth managers can:
- Add or replace a vendor product to increase their service offerings without disrupting advisors or client experience
- Allow the generation of real-time insights from data, meaning that advisors can work proactively rather than reactively
- Have access to next-best-action for individuals, groups of accounts, or across the client base – which means that clients are served more efficiently and that should contribute to a higher retention rate
- Leverage the elastic capabilities of a cloud-hosted solution to serve a large advisor/client base while keeping the operating cost low
3. A strong data foundation
Data is an integral part of a successful and efficient wealth management business. There needs to be a “single source of truth.”
As businesses progress toward various product-based solutions, the level and sources of data expand. The goal should be to build a data architecture that maintains a “golden record” or master source. The “single source of truth” can be established through integrations and workflows that enable data transfer without creating duplicate records.
Building a consolidated data store that aligns to a business taxonomy and leverages a canonical structure can reduce vendor product dependencies. It allows business processes to span various products and leads to efficient client-servicing workflows. Consolidated datastores require not only scalable cloud-based infrastructure but also strong governance policies and security procedures to support evolving data capabilities. Advisors can import alternative data sources or third-party datasets with a flexible and scalable data architecture and generate smart insights for prospects to improve client conversion rates.
4. Do more with consolidated data
Artificial intelligence (AI), machine learning (ML), and natural language processing (NLP) are likely to offer significant benefits to wealth management firms.
AI-powered automated data analysis can help wealth managers to analyze large datasets more quickly. Advisors can better understand customer behavior and assist with customer segmentation and the customization of product offerings. It can also help with financial product marketing.
Wealth managers can leverage NLP-based digital assistants to enhance the client experience. Digital assistants can understand and answer questions on markets and the current outlook for investors, use graphs and visual aids and draw on historical data and the latest research. They can also answer procedural queries regarding account opening and other client-servicing needs. These digital assistants enable advisors to save time by focusing on higher-value tasks.
Being technology-enabled ensures an organization can be confident that its next-generation platform is not just meeting a short-term goal but setting a strong foundation to meet ever-increasing business demand.