Leading global research firm, Roubini ThoughtLab, released its new study today titled, Wealth and Asset Management 2022: The Path to Digital Leadership. The research, which explores how digitalization, globalization, and consumerization will reshape digital leadership in the investment industry by 2022, is informed by a survey of 1,503 investment providers from 15 countries, in-depth interviews, and rigorous cost-benefit analyses. The study, sponsored by Appway, a technology provider for the financial services, as well as wealth management and consulting firms, provides actionable insights across all levels of digital maturity and forecasts trends in wealth management’s digital future.
Staying ahead of the technology curve
The report indicates that digital leaders are well ahead of others in creating a seamless customer experience. The majority are taking steps to adapt the channel mix to support their customers digital behaviors, providing easy 24/7 access through any device, and leveraging data and analytics to fully understand their clients’ needs and behaviors. Digital client onboarding is fast becoming the norm: 43% of firms now offer it, and the number will rise to 69% by 2022.
The future of work
Investment providers are taking measures to ensure they have the right talent to seamlessly combine human advisors and automated solutions such as chatbots and robo-advisors. Over one-third of investment providers believe that digital technology will improve decision making (38%) and productivity (36%), but at the same time is will require greater skills in key areas, such as innovation (35%), digital (33%), analytical (32%), and communication (32%).
Successful digital transformation requires a solid business strategy, standardized technical infrastructure, and tools that support the client-advisor relationship. With these elements in place, leading institutions have been able to offer client-centric services, empower their advisors, and achieve higher levels of business efficiency.
The research shows that firms in later stages of digital maturity now spend 11.6% of their revenue in technology, and plan to increase that investment to 17% by 2022. While these investments can be large, the payback is even larger. Based on a five-year payback, investment providers on average see an ROI of 5.5% (of revenue) per year when they move from a beginning to a transitioning stage, and an ROI of 5% when they go from transitioning to mature.
“With digital expectations rising rapidly, and a new generation of digital natives in sight, the stakes are high. This is not just about ROI, it is about survival,” says Roubini ThoughtLab’s CEO, Lou Celi.
Appway founder and CEO, Hans Peter Wolf, agrees. “This study highlights the tremendous business potential for digitalization, but also the fundamental steps wealth management firms must take to not only survive, but to thrive in the digital revolution. What we’ve proven to our wealth management and retail banking clients is that investing in technology isn’t just good for business. Installing technology that streamlines the back-end and orchestrates processes improves customer experience, simplifies the work of relationship managers, and allows our clients to easily adapt to changing market forces.”
The full white paper can be downloaded at here.