Where next for Wealth Management Technology?
Vermilion Software co-founder Simon Cornwell was recently speaking at the WealthBriefingAsia Singapore Summit. He took part in a panel session discussing the future of wealth management systems in Asia. Below is a summary his contribution to the discussion.
“I read in a recent survey reported in the Wall Street Journal that 57% of HNWIs aged over 40 and 80% of those aged under 40 would consider leaving their wealth manager if they were not offered digital services. This is a fascinating statistic in itself, but my challenge to the industry is that wealth management clients are not just interested in any digital service – it has to be the right one. Mobility isn’t just a new distribution channel to clients; it’s a new way of doing business. It should be seen as an integral part of a value-add business, not the latest technology fad. And in my view, the wealth management industry has been too slow in responding to this new approach. Rather than, for example, just letting investors access their monthly report from their iPad, the technology needs to afford more freedom to investors to ask questions and interrogate the performance data. It’s not about enabling investors to self-service; it’s about improving the relationship between advisor and client, and enabling the client to have more ownership. Simply putting a new digital front-end on your client reporting engine isn’t the answer. Giving investors the salient information in a digital format isn’t the answer either. My view is that investors need to be able to ‘pull’ the data that they require, not just receive what the wealth manager ‘pushes’ their way. Many wealth managers don’t want their clients to ask questions and certainly do not encourage them to do so. They see digital services as a way of giving more automated information to the investor. In contrast, I believe that the right kind of digital services should facilitate more client engagement and more trust. Media, phone and other technology companies have changed their entire business models to reflect the opportunities presented by digital services. Unfortunately I don’t think that some wealth managers or many technology suppliers are moving at the speed the market wants to move at. If you introduce digital services to your clients, you need to consider changing your entire business model. It’s an opportunity, not a defensive mechanism designed to cut operational costs. Wealth management firms that are embarking on a mobility programme just because everyone else is doing it are missing the point.”
He referred to issues such as the need and benefit of having multi-lingual reporting. “That is a trend to which technology can lend a massive hand.” He said this is a big issue in Asia.
“This is also about creating personalisation and scale but not having to increase headcount.”
“I think you will see a return on all this investment over the next five years.”