Solving the 3 Pitfalls of Uncertainty in Wealth and Asset Management

The unpredictable ebb and flow of the economy can be a challenge for wealth and asset managers. However, beyond the benefit of simply cutting costs, intelligent automation (IA) can cultivate enduring resilience by streamlining operations and revealing hidden efficiencies. Regardless of economic outlook, this empowers your business for sustained optimization. IA can help investment operations teams navigate the uncertain wealth and asset management landscape and avoid common pitfalls.

What Drives Uncertainty?

Economic factors

Uncertainty for wealth and asset managers usually comes from fluctuations in interest rates, stock prices and currency values. The value of investment portfolios can be impacted by sudden market movements requiring adjustments to investment strategies. Operations teams must react to new types of investment and savings vehicles and fluctuating trading volumes as they adjust investment strategies.

The financial services sector has also been dealing with an ever-increasing skills gap stemming from the effect of shifting demographics, the cost-of-living crises and inflation on the evolving labor landscape.

Regulatory changes

To avoid the cost of regulatory fines, investment management leaders must stay ahead of the latest compliance demands as a wave of upcoming new regulations approaches. Some of the new rules include changes to T+1, shareholder reporting, fund reforms and cyber risk. There are also expected or proposed rulings related to open-end fund swing pricing, ESG disclosures, safeguarding client assets and managing conflicts from predictive data analytics.

Unanticipated risks

Urgent bottlenecks can form from the onset of black swan events and unpredictable risks, requiring the need to reevaluate the entire risk landscape. While firms can’t know exactly what an event will be until it fully happens, they usually have some insight that something is going awry, and can pre-empt the risk as much as possible.

When teams lack sufficient time or capacity to react appropriately, they are detracted away from business as usual due to the instant strain on investment operations. This can leave investment managers open to the risk of failing to meet regular obligations and struggling to meet investor, regulatory service or client levels.

Avoiding the Pitfalls of Uncertainty with IA

Uncertainties can profoundly impact investment operations whether those uncertainties are regulatory, economic or unanticipated. Firms must adapt their processes, resources and strategies to navigate the changing regulatory environments and market conditions. These factors escalate costs while causing operational disruptions that impact employee and investor experiences.

Firms can achieve a huge competitive advantage through the ability to react quickly to unpredictable risks. Agile operational capabilities, strong risk management practices and proactive compliance measures are essential for maximizing opportunities and mitigating risks in an uncertain environment, while also minimizing the impact on your bottom line, services and people.

IA can help you overcome the pitfalls of responding to such situations.

Pitfall: Operational disruptions

Inefficiency challenges can stem from uncertainties that disrupt middle and back-office operations. Investment management firms must be equipped to scale up, down or pivot at pace in response to dynamic regulatory changes or market volatility.

The COVID-19 pandemic and recent economic pressures highlighted the limitations of traditional business models, which led to a greater focus on automation as an integral part of transformation and a strategic priority. Organizations with automation already implemented have demonstrated the significant potential for automation to ensure agility, growth and business resilience through their ability to handle disruptions.

IA solution: Continuous seamless processing

Business process automation (BPM) is software that helps design, execute and monitor end-to-end business processes. Also called process orchestration, it helps orchestrate the flow of work between human and digital workers like conversational AI, robotic process automation and intelligent document processing. BPM also orchestrates the flow of work across enterprise applications. BPM offers a range of operational, risk prevention, strategic and cost benefits through automated workflows, optimized processes and standardized processes.

When employees’ attention is diverted to deal with the impacts of regulatory, economic or unforeseen uncertainties, BPM software integrated into operating models enables firms to continue operating seamlessly.

Pitfall: Client and employee dissatisfaction

Wealth and asset managers will lose client trust and satisfaction if they fail to manage risks and communicate effectively. Clients may question the ability of investment professionals to protect their interests as they navigate uncertain market conditions. Similarly, to enhance your investment operations, you must keep the already diminishing industry talent pool engaged and happy. Otherwise, chaos can erupt when adequate protocols and governances are not in place and affect the impact of shifting regulations, geopolitics, economics or black swan events.

IA solution: Deliver Exceptional experiences

Firms can use IA to provide certainty for employees and clients during changing times or crises. Reassurance is given that all processes can continue running smoothly with 100% accuracy while easing the pressure on your people and maintaining service levels by using automated workflows to accelerate end-to-end processing with minimal or no human intervention.

In uncertain times, IA can also help firms build a deeper level of trust with internal stakeholders and clients by automatically distributing proactive updates. IA can also give employees the information they need to deliver informative, empathetic and speedy responses.

By freeing your human employees from the burden of mundane, repetitive, manual and high-risk tasks, your employees can maximize their skillsets to focus more of their energy on strategic, interesting and higher-value work.

In addition to giving employees a greater sense of job satisfaction from knowing their clients are delighted with the service provided, firms that prioritize investor experiences benefit from longer-term client value. IA is an essential tool for staff engagement and retention, which creates a more productive, committed and consistent workforce.

Pitfall: Plummeting profitability

When firms rush to reallocate resources to address a change and risk increased errors that further escalate the already heightened workload with subsequent rework, uncertainty can quickly drive up costs. Employees may respond to such strained operations by seeking alternative work opportunities, leaving firms to stumble onward without sufficient skilled talent.

Meanwhile, existing and prospective clients consider a firm’s ability to face uncertainty when selecting a wealth manager. Firms that can demonstrate client-centric service, strong risk management capabilities and investment expertise are better positioned to attract new clients during uncertain times.

IA solution: Protect your top and bottom line

IA improves the customer experience to support top-line revenue growth and facilitate cost reduction through continuous seamless processing to protect bottom-line net profit.

When digital workers are implemented with artificial intelligence (AI), analytics, intelligent document processing (IDP) and BPM, they can execute tasks 24/7, faster than humans and with 100% accuracy. AI and IDP are particularly helpful at promptly detecting and addressing issues, minimizing exception handling and rework.

The right IA solution will connect your existing tech stack with third-party and internal data sources and systems, maximizing profitability by mitigating the need to invest in new technology infrastructures.

To learn more about how IA can help you excel in times of uncertainty, contact us.