Digitization is no longer the future—it is the present. If you want to remain competitive and offer your clients the best services possible, your wealth management firm needs to undergo a digital transformation. Why is it important? How to do it? Find it out in this article!
Why Do You Need Digital Wealth Management?
Digital wealth management is slowly becoming a standard, something that is expected by investors. But why is it so? What makes it so important? There are several reasons behind this change.
The Great Wealth Transfer
First, we need to mention the Great Wealth Transfer—the largest asset transfer in history. Currently, numerous Gen Z members and Millennials have started to inherit wealth from their relatives, slowly becoming a major force in the world of wealth management and changing it.
The younger generations strive for digitization. They are accustomed to online communication channels and find them convenient. This is why you must embrace digital technology to meet the expectations of such high-net-worth individuals in wealth management.
The Power of Data
The power of data is the second reason digital transformation is critical in wealth management. With multiple tools and technologies available, we have reached a completely new level of data processing capabilities. Artificial intelligence and machine learning enable us to extract insights from all the information we have, insights that can truly be a game-changer.
Embracing the power of data isn’t simple, though. You first need to cleanse it, standardize it, and store it all in one place. Then you need technology that can process it, like advanced AI. This is why you need to have digital solutions in place if you want to make fully data-driven decisions.
What do you need that data for? There are multiple uses, all of which constitute important features of wealth management services for your clients, namely:
- personalization,
- semi-automated and algorithmic trading,
- financial forecasting,
- integrating all information into a single overview.
Efficiency and Effectiveness
Finally, you should embrace digitization in wealth management for the sake of efficiency. Digital process automation is extremely easy to achieve, while technologies like OCR and biometrics can accelerate certain processes (e.g., authentication).
While you cannot automate all the procedures within your organization, you can make most of them quicker and more effective with the right technology. In reality, this means that wealth management businesses that embrace digital technology have a major advantage over their competitors.
How to Conduct a Digital Transformation in Wealth Management?
We’ve established why you need to digitize your wealth management services. Now, let’s discuss how to do this. The process involves several steps—here’s a brief overview of it.
Define Your Current Tech Stack
First, you need to analyze your current tech stack and decide:
- which technologies are legacy and should be removed,
- which technologies aren’t innovative but can remain a part of your stack,
- which technologies are crucial and cannot be removed.
This analysis is critical in terms of finding the right IT solutions for your organization.
Set Your Goals and Research Your Needs
Secondly, you need to decide what you want to achieve with your digital transformation. Here, think about the processes you want to improve and, perhaps, what platforms (or features) can help you.
Find New Technologies Worth Implementing
Thirdly, you need to find a wealth management platform that suits your needs. This step requires extensive research, as you will need to learn a lot about available solutions before deciding. How to do this? We’ve tackled this topic in several articles, so read them to find out more:
- How to Select the Right Portfolio Management Software for Wealth Management
- Well-suited Portfolio Management System for EAM - how to choose the best one for your company
What you need to remember at this point is that the new tech should be compatible with what you are already using. This means that it needs to be possible to integrate all the data from your tech stack into a single source. Otherwise, you might create a data silo—a major blocker for using data to your advantage.
Deploy and Configure the Tech
With all the above steps completed, you can proceed with deploying your technology. This process might take some time, in case of WealthArc it’s just a few weeks (which is quicker than for most wealth management platforms).
Train Your Team
While you’re in the onboarding phase and preparing the new tech, you need to organize training for your employees. They need to learn how to utilize this new technology effectively, as otherwise, they won’t be able to use it to its full potential.
Monitor and Improve
Finally, you’ve undergone your digital transformation—but it’s not the finish for your wealth management firm. You still need to monitor the new tech stack and look for potential improvements.
The Takeaway
The digital transformation in wealth management has been here for quite some time, so it’s time for you to join it. If you are looking for a reliable platform that will help you enter the 21st century, feel free to contact us at WealthArc—our platform is exactly what you need!
You may also read: Case study: How Winvest is using WealthArc and benefits in everyday work
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