Tech personalisation ‘differentiating’ wealth managers

Wealth managers believe that delivering highly personalised services is essential to achieve a competitive differentiation, but a third are being held back from doing so by old technology.

A new report from Forbes Insights and Temenos, found that 64 per cent of wealth managers are segmenting clients and creating detailed and distinct profiles in line with the expectations of high-net worth individuals (HNWIs), but 32 per cent are still lagging behind.

The report took in 305 high-level executives - over 40 per cent were in the C-Suite, a fifth were heads of asset management and 14 per cent and 10 per cent were managing directors and heads of business - at investment banks (66 per cent) and at private banks (31 per cent) as well as 105 HNWIs - 70 per cent had a net worth between £1 million or more - in March.

Technologies such as machine learning and process automation have transformed the wealth management experience for both financial advisers and the HNWIs they serve. Now almost seven in 10 of the wealth managers surveyed say that a virtual platform is as essential way to enhance the client experience – compared to a quarter in 2016.

Pierre Bouquieaux, product director for wealth at Temenos, said: “Both HNWIs and mass-affluent investors want to enhance their relationships with wealth managers through more personalised services.

“Technology from the client perspective, should facilitate more active portfolio management, unlock new insights through predictive analytics and reveal opportunities that may exists in alternative investments,” he added.

The report showed that over the past three years, HNWIs and mass affluent have been calling for better results from greater predictive analytics and forecasting (36 per cent).

In the report, Eddy Tai, global head of operations and technology at Bank of Singapore, commented: “We believe that in the future, the banking model will be different – systems will be different and connected to many partner systems and platforms, forming an extended ecosystem.

“In this new dimension, you need open API; you need to be more scalable through the cloud.”

Separately, research from Wealth Wizards has found that financial advisers are losing an average of 43 working days a year performing tasks that could be automated with technology.

The tech platform surveyed 140 financial planning businesses, employing a total of 21,000 financial advisers, about their use of technology. Businesses were asked to estimate the average amount of time being spent at their company on the end-to-end advice process where technology is not being fully embraced – the respondents, on average, revealed that they spent 20 hours per client on this process.

Asked to estimate the amount of time spent in the same process - which includes fact-finding, risk-profiling, market quotations, solution reviews and recommendations, plus the drafting of suitability letters - when it was fully automated with technology, this process took only seven hours per client on average.

The time-saving in the advice process (13 hours per case) equates to 43 days, on an example of 25 full advice cases, assuming a 7.5 hour working day. This time saving could then be spent on further relationship management or client base growth depending on the aspirations of the individual advice businesses.

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