North American Wealth Management IT Priorities and Strategy in 2023
NA Wealth Managers Set Their Sights on Innovation
This report is a companion piece to the Global IT report and focuses solely on North American Wealth Management IT Spending which includes Canada and the US. North American IT spending will grow by 4.6% on average in 2023 compared to 3.6% in 2022. Wealth management firms have increased their spending on tech in response to mounting competitive pressures from fintechs and nontraditional challengers such as banks, insurance companies and even large scale retailers.
73% of survey respondents indicate that the competition from fintechs and other challengers has intensified. Fintechs are moving beyond regulatory boundaries and focusing on the client experience. They are converging products and services based on what makes sense from a client experience perspective and leveraging existing regulatory entities to provide banking and wealth under the same umbrella – personal finances.
Migration to cloud, automating workflows, employing low code/no code, and exploring generative AI use cases top the list of technology investments as wealth managers work to create a more scalable, agile and responsive enterprise. Cloud enables IT departments to manage innovation rather than operations.
The front office (onboarding, digital channels/client engagement, advisor and client dashboards) is the biggest priority when it comes to allocating IT spending. 36% of the total IT budget is allocated to enhancing and developing the front office. Data, however, is the superpower. 30% of firms report a 10% increase or more in spend for data and analytics. Another 23% report increasing IT spend by 5 – 10% on data initiatives.