This week I returned from maternity leave and one could say that the world is a very different place from when I went on leave in July 2019. Regardless of the circumstances, I am happy to be back on the wealth management team and look forward to reconnecting with our clients.
2020 is a year for the history books with COVID-19 dictating the narrative. The world has effectively shutdown due to the coronavirus – the repercussions of which have sent shockwaves barrelling through economies, healthcare systems, and societies. Remember when Brexit was the only “crisis”? There is the added pressures of stock market swings (oil, anyone?) including the largest Dow drop since 1987, Brexit negotiations, and did I mention it’s an election year in the US? 2020 has seen the rumblings of the US-Iran crisis, the escalation of tensions between the US and China, the Australian bush fires, the impeachment trial of US President Trump, and oddly enough, the validation of UFOs. If you haven't started an email with "in these unprecedented times", one has to wonder how you have been so lucky as to escape the world turning upside down in 2020.
COVID-19 and its fallout have created extraordinarily challenging circumstances. Governments around the world face the question of how to reopen locked down economies and societies while COVID-19 is still rampant and putting significant pressure on healthcare systems and businesses. Businesses continue to navigate through what has become a “new normal”, and for the most part, have gotten through the crisis management phase. They are now focused on the forward-looking “how and where do we go from here?” chapter of COVID-19 planning.
2020 is also the year that new data exceeds the total volume of data stored worldwide. In fact, in 2019, the average person with internet access consumed and created almost triple the figure from 2014, and that number is expected to triple by 2024. And this is before COVID-19, which has put an unparalleled strain on digital channels and the enterprise across front-to-back office functions.
Take Zoom, for example. The unforeseen surge in users on Zoom from 10 million in Dec ’19 to 300 million in April ’20 has had major implications on data privacy, as well as the migration (although now I think we can say stampede) towards cloud-based services, such as AWS and Oracle, on which Zoom relies heavily. Lesser known, but formidable cloud-providers are also gaining traction, as is the growing popularity of multi-cloud-based platforms.
The disruption in the ecosystem will put a spotlight on technology shortcomings and accelerate innovation.
The demonstrative value of AI across industries has created a new norm of how businesses operate. And it is here to stay.
The closure of bank branches is nothing new, but the pressure on call centers and digital channels is remarkable. As is the pressure on firms to find a scalable and sustainable contingency plan in real time.
The wealth management industry is based on relationships and COVID-19 will underscore the importance of meaningful, customised, and compassionate communication. Client attrition and retention should be front of mind for FIs and vendors. Advisors are finding new ways of staying connected with clients while navigating GDPR and unregulated platforms, such as Zoom, Skype for Business, or even WhatsApp; technology platforms are testing the durability and depth of their omnichannel promises and remote installation and integration capabilities.
Millennials, a generation whose key earning years are sandwiched between the Great Recession and COVID-19, as well as the up and coming Gen Z clients whose earning potential will be stifled, will continue to encourage innovation, especially in digital financial planning tools. Goal-based planning tools for clients across the wealth spectrum will be as important as ever.
In addition to exploring the implications of COVID-19 on wealth management firms and technology providers, I am eager to investigate innovation within the subject areas that I have historically researched and am passionate about:
- Online brokerage market
- Evolution of the wealth management client base
- Wealth management technology providers and platforms
I hope you and your loved ones are staying safe, sane, and focusing on normality in our new reality. Perspective and routine are critical during this unprecedented time (I couldn't help myself) - it is not unfathomable to feel as though the walls of your mind are closing in faster than the walls of your home for those of us living in cities on full lockdown (London, where I am based, is around the 50 day mark). Thankfully, technology can keep us close to family, in touch with colleagues, and create a new working environment so business and life can keep moving towards a new "BAU".
Necessity is the mother of invention (innovation) and COVID-19 has not fallen short of doing just that.