Wealth Management technology and operations trends 2018


Monday, July 23, 2018

Wealth Management technology and operations trends 2018

What’s in store for the wealth management industry as we head through the rest of 2018? In the latest annual WealthBriefing and SS&C Advent Technology and Operations Trends in Wealth Management report, we reveal critical challenges and opportunities facing wealth managers. Read on for key highlights.

Regulation remains a top wealth management burden

Once again, the ever-expanding global regulatory agenda is a major focus among industry participants. For globally-active financial institutions, the number of regulations they must track has tripled since 2011. More than half of wealth managers believe regulatory change will speed up even further over the next three years.

Compliance has become resource-intensive and in some cases is expected to cost 10% of firms’ revenues. As a result, firms are investing in technology-driven automation and enhanced data management to improve efficiencies and ease the cost burden.

Another issue absorbing wealth managers’ attention is cybersecurity. Here the level of preparedness is worryingly low, with over a fifth of firms not confident in their capacity to tackle cyber-threats. Only 15% of firms say they are highly confident in their security capabilities. This marks a clear need for wealth managers to start devoting more resources and attention to stronger cyber security.

Cloud-based technology supports efficiency and service gains

The opportunities that efficient technology infrastructure provide emerged as a major theme in this year’s survey. In the past, the industry was relatively tech-shy, whereas now wealth managers are increasingly looking at cutting-edge capabilities to help improve both their behind-the-scenes operations and the client experience. One notable trend is the growing robustness and acceptance of cloud capabilities. This continues to fuel enthusiasm for outsourced or hosted technology solutions, with half of firms now willing to go down this path. Outsourced and hosted technology are seen as an effective route towards greater efficiencies and streamlined costs, a problem the industry has been wrestling with for years. Other major benefits include improved service quality and reduced operational risk.

Portfolio management in desperate need of streamlining

Streamlining portfolio management has become a top priority. Only 6% of respondents use a single system to construct, manage, monitor and report on their portfolios. Almost half of firms reportedly use four or more solutions. The resulting inefficiencies are particularly clear when compiling investment performance reports, rebalancing and during initial portfolio construction. For many of the firms that were surveyed, they are keen to offer clients a wider selection of asset classes and investment instruments, such technology shortcomings need addressing urgently. Having a single portfolio management system would make it easier to offer clients more investment variety.

Positive prospects … but constraints as well

Overall, the vast majority of survey respondents are upbeat about the wealth management sector’s growth prospects. This optimism is prominent across the globe in almost equal measure in North America, Europe and Asia.

However, maximizing the benefits of the latest technology trends demands forward-thinking attitudes and significant strategic investment. Wealth managers that can devote resources to improving the client experience and optimizing their internal performance will be well-placed to profit from the industry’s continued growth.

For a full picture of trends in wealth management, download your complimentary copy of the Technology and Operations Trends in Wealth Management report.



Alternative Investments


Theme picker