Wealth Managers: Run, Don't Walk, to the Cloud
Or Risk Being Left Behind
The wealth business operating model relies on optimizing a balancing act between competing forces, regardless of target market segments. Wealth is about balancing Scale, Efficiency, Agility, Innovation and Security - while simultaneously engaging with the customer on a “hyper” personalized level that is very specific to each client’s wants, needs, and wishes. Sounds tough? That’s because it is, and cloud continues to be a game changer.
Not only has the cloud’s core attributes been the “enabler” for wealth managers to optimize their business operating models, but cloud also has allowed for the rapid acceleration of technological innovation across the changing wealth management ecosystem.
We’ve set out to examine public cloud adoption among the largest wealth management firms and benchmark the state of the wealth management industry.Further, we explore the drivers behind cloud adoption, detail different strategic approaches used by wealth managers, catalog factors influencing cloud strategies, and tally the tangible gains realized by firms that have made the move.
Historically, wealth management cloud adoption has lagged other industries due to the heavily regulated nature of the financial services industry combined with concerns over the protection of highly sensitive client data.
Wealth management information security; risk and compliance; and ecosystem management, integration, and control preferences are exceedingly high and wealth managers have been cautious about outsourcing to third parties.
However, wealth management attitudes toward the public cloud have changed due to increased competitive pressures, the rapid pace of technological change and tangible success stories. This has resulted in an accelerated cloud adoption. Wealth managers are outpacing broader industry benchmarks as illustrated in the chart below.
Wealth managers must embrace new technology ecosystems which includes cloud - or be left behind.