The ability to innovate quickly and effectively is turning into a core asset. Examples of digital transformation within wealth management span the entire value chain, from client onboarding to fulfillment and trading. For example:
Client onboarding. In Europe, a wealth manager has launched a service allowing clients to open accounts using videoconferencing. Others are following suit and digitizing the onboarding process using innovative technology, from electronic signatures and online ID verification to biometric authentication.
Advice. In Asia, a wealth manager has introduced a suite of digital banking tools for tablets and smartphones. The app provides personalized content, trading tools and opportunities for multichannel collaboration. This is part of the transformation of wealth management through digital technology.
Sales support. Providers are designing tablet apps to support relationship managers in client meetings by guiding them through a smart, adaptive and interactive sales process, consolidating all relevant sales functions in a single platform.
Investment recommendations. A large global wealth manager has introduced personalized “health checks” that identify potential issues with personal portfolios, offering tailored remedies to bring the health status back to desired levels.
Fulfillment and trading. A number of wealth managers are building digital solutions that provide social marketplaces where customers can trade stocks and funds online.
As digital continues to transform wealth management, senior executives need to ask themselves three critical questions:
- What do clients expect in terms of digital capabilities? Traditionally, wealth managers interacted with clients almost entirely by phone, email and face-to-face presentations. Today, however, a large majority of clients would not hesitate to switch wealth managers in exchange for better digital capabilities.
- What can wealth managers learn from the new digital upstarts? Many of the digital trends are driven by robo-advisors, which are already capturing parts of the wealth management value chain. Incumbents should take the opportunity to learn from the approaches these digital upstarts are taking.
- How can wealth managers benefit from the emerging ecosystems of FinTech providers? FinTechs are proliferating and delivering innovative business-to-business solutions. Many wealth managers are seizing the opportunity to cooperate with FinTechs in building new digital capabilities.
Answering these questions involves reconceptualizing the key roles of client, competitor and service provider to meed the digital age.