In the digital era, every industry is achieving transformational change. Digitization in each sector is reducing cost of operation and improving the efficiency. Similarly, wealth management is facing with digital disruption that can transform the traditional wealth management.
Some companies have realized the potential benefit of digital revolution in wealth management and they are trying to exploit its benefit whereas some companies are still struggling to understand its possible implications.
Wealth management is one of the most lucrative sectors from financial point of view. It provides growth opportunities to wealth of an investor with calculated risk and return approach.
With digital revolution, investor's capability, their expectations and preferences has dramatically changed. This compel the industry regulator to change the industry standards and wealth manager to change their way of creating wealth management.
Recent Trends transforming the wealth Management
- Investor with new capability
The new generation are born with technology in their hand. Technologies has increased their capability in terms of awareness regarding different alternatives and decision-making power. The new generation is more interested to conduct their own research rather trusting fully on adviser. The needs and expectations and the view point of investors regarding the investment, wealth creation and advice has changed with the changing the living pattern. The today's investors are open to advice from many sources, they are influences with their different reference group, social media and not restricted only to financial experts and investment adviser.
The changing behavior pattern open up diversified opportunity for wealth manager to fulfill the varied expectations of investor with customized solutions.
- The new wave of Competition
The competitive environment is becoming more complex as banking industry are trying to expand their services towards wealth creation and wealth management companies are trying to provide banking and financial services. Banks use their trust over public and huge customer base for cross selling of wealth creation too banking and their financial service receivers.
The start-ups with digital innovations are competing with their new means to serve the customer and posing a threat to existing companies.
Using big data analytics in wealth generation and rendering financial services can enhance the efficiency of wealth manager in delivering high value to the investor. Analytical capability helps wealth management company to continuous monitor financial performance and track growth opportunities with predictive models' wealth manager can foresee the possible cause of risks and uncertainty. Based on this they can offer investors with the options that include low risk factor and how growth opportunities.
- Move towards more secured life
With the shift towards privatization, job security became one of the most common challenge. Now, people are creating wealth to secure their life after retirement. The concern to maintain the living standard is gaining importance as increasing inflation, rising medical cost, reducing retirement incentive by government companies as well. So, most of the investors aim is to create wealth to secure their retirement money. To meet this expectations wealth manager needs to find out the new ways to engage people more and more during their working life so that they can understand their behavioral pattern and their financial goals and came with innovative solutions.
The unstable economy and rising inflation results into uncertainty in different wealth generation options. Today's investors are looking for options with low risks, short term gains and high return on investment. The wealth manager using what if analysis on the analytical model can establish cause and effect relationship and provide with better decision choices to investors.
To deal with these disruptive trends, the wealth management industry must look for new ways to deal with customer. The emerging technologies can be used to deliver seamless investor experience in the whole process. The different strategy that can see innovation with digital technology is communication, engagement, procedure, performance management, risk estimation etc.