Outsourcing in Wealth Management: The Drivers and Strategies

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20 November 2016


Celent has released a new report titled Outsourcing in Wealth Management: The Drivers and Strategies. The report was written by Kelley Byrnes, an analyst with Celent’s Securities & Investments practice.

This report establishes the primary drivers of outsourcing today and projects what the drivers will be in the next 12 to 18 months.

The top motivations to outsource, compared to five years ago, include: improving efficiency; adapting to fast-changing technology without spending on dedicated IT teams; enriching the customer experience; and regulatory compliance and transparency. In an increasingly digital ecosystem, outsourcers must deliver solutions that address the needs of: cybersecurity, omnichannel delivery, client-facing tools, client-advisor collaboration tools, and real-time client reporting.

In the next 12 to 18 months there will be an acute focus on outsourcing front office functions that include: suitability tests; KYC procedures; components of the advice and planning process; and help desk services.

“At today’s rate of technological progress, it does not make sense for wealth management firms to build or buy every new technology that comes along,” Byrnes commented.

“One of the main drivers of outsourcing today is experimentation. Wealth managers can experiment with the latest technology by working with a technology provider before committing vast resources to a technology that may only be a fad,” she added.