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The customer profile is changing, and the wealth management firms must cater to the increasing expectations and the digital appetite of the millennials and Generation Z today. It has become apparent for wealth managers to ensure that their advisory models are future-proof as the one-size-fits-all approach no longer works in client servicing
Fremont, CA: Technology is creating historic shifts in industry footprints worldwide. While a few traditional industries were previously averse on embracing digital innovation, they have started to grab the fast-evolving technology to use to their advantage. Wealth management was one such technology-averse industry that has long been doubting to embrace the digital wave. A majority of wealth management firms function around a rigid legacy system that was implemented as stop-gap solutions rather than as part of a holistic transformation. However, with the evolving market landscape and stiff competition from outside, today, the industry has realized that its long-term survival depends on digital transformation.
While technology has been part of the wealth management industry for a long time, its usage was limited to the internal needs of firms such as portfolio accounting and management. However, the recent years saw an evolution in the application of technology in the industry, and there has been an increasing number of solutions built for wealth management ever since. Shifting demographics of the customer profile and rising external and internal industry threats have also contributed to this paradigm shift. The customer profile is changing, and the wealth management firms must cater to the increasing expectations and the digital appetite of the millennials and Generation Z today. It has become apparent for wealth managers to ensure that their advisory models are future-proof as the one-size-fits-all approach no longer works in client servicing.
Gone are the days where wealth management firms could call themselves digitally advanced with a website and email correspondence. Insights from artificial intelligence (AI) and data analytics could play a significant role in refining the advisory models of wealth management firms today. Notably, AI is expected to play an increasing role in wealth management in the coming years. It could help wealth managers in streamlining the workflow while staying compliant and secure. With the ubiquitous technology, the amount of data coming out of various platforms that the wealth managers could use is surging. Wealth managers could gather valuable insights about client behavior and market trends from these data with a proper analytical tool.
Technology has also become a highly significant factor for wealth managers to gain market share, especially among young investors. While the evolution of technology remains early in its journey in the industry, it is set to make it more client-centric, personalized, cost-effective, transparent, and efficient.