Speaking at Objectway’s OWIN conference, IDC associate research director Thomas Zink said digital adoption in the wealth management community had been strong in business optimisation functions, reducing costs through streamlining processes, but had been very weak in digital business innovation.
Zink predicted that by 2022 every wealth management firm would have developed or licensed a hybrid robo/human advisory platform or leveraged artificial intelligence to manage funds.
He also cited research from McKinsey that claims digital customers are between five and 10 times happier and more engaged than clients of traditional wealth managers.
He said that new regulations, including RDR, Mifid II, data management requirements and regulatory requirements such as standardised reporting meant smart automation such as automated monitoring, tracking and learning from customer interactions would be needed to remain competitive.
He also contended that existing financial services providers were finding it more difficult to remain front of mind with investors because of their increasing engagement with peer communities, social media, influence from friends and family, These factors were becoming key determinants of investment decision-making and existing players will have to upscale their influence in these areas.
Zink said: “PSD2, the open banking regulations means any fintech can come in and create services for customers. With GDPR and open banking, the key message is that the regulators want to put the customer back in control of their data. Disruptive technology is shaking up the competition. Smart automation, data analytics and machine learning will be increasingly significant.”
