Wealth management firms lagging behind in the use of digital technology

Wealth management firms lagging behind in the use of digital technology

Introduction to Wealth Management

PwC has released a new report titled ‘Sink or swim: Why wealth management can’t afford to miss the digital wave’ which is based on a quantitative research of more than 1000 high net worth individuals across Europe, North America and Asia, plus qualitative interviews with more than 100 relationship managers and a number of CEOs of wealth management firms and fintech innovators.

The report finds that wealth management is one of the least tech-literate sectors of the financial services industry globally. As per the report, to survive in a digital world that is evolving at breakneck speed, wealth management firms needs to take immediate action to demonstrate their value to existing and future clients – and to keep pace with the new waves of digital opportunity that are emerging. ​Around 83% of business leaders in a PwC Global survey of financial services sector believed that they are at risk of losing business to standalone Fintech companies

Some of the key findings of the report are:

  • 69 per cent of high-net-worth individuals (HNWIs) are now using online and mobile banking, but only a quarter of advisers offer digital channels beyond email
  • Many HNWIs who are under 45 years of age are willing to trade off data privacy to get solutions they want.
  • Globally only a third of wealth management clients claim to be very satisfied with their chosen firm’s service and among clients with assets of more than USD 10 million this drops to 22%
  • 14% of HNWis currently use robo-advisors and 47 % of those who do not use robo-services said they would consider using them in the future

Some firms in the wealth management sector are aware about the technology inadequacies, and some overestimate their digital capability even when the only service they offer to clients is a website.

Majority of the relationship managers do not consider robo-advisors as a threat and insist that their clients do not want digital functionality which contradicts their client’s opinion on the same.

As per the report, firms that will embrace and seize the digital opportunity now will be in a powerful position to deliver propositions of real and sustainable future value.

Read the complete report from PwC here. For more resources, visit the Holland FinTech dedicated insights page here.

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