In its article from March 2017, Synpulse takes on the main challenges and opportunities of technology and a fast changing financial industry that wealth management institutions and private banks are presently being confronted with.
The article, Accelerating Digital Wealth Management, released by international management consulting firm Synpulse, takes on the necessity of financial institutions to keep up to speed with the new environment now being brought to the table by competition, regulators, and empowered consumers.
Synpulse emphasise that approaches based on strategic transformation initiatives can be time-consuming and inefficient when trying to cope with technology challenges. Instead, the article focuses on a practical acceleration approach implemented in various fronts that, step by step, can achieve the goals of a major programme.
Given the changing nature that the financial landscape has adopted in the recent decades, it is important to mention some of the main drivers of change within this ecosystem. Among these, the article mentions:
- The increasingly competitive environment in the financial industry that brings anxiety among private banks and wealth managers regarding cost-income ratio
- Unpredicted events that force regulators to restrain the reach of financial institutions
- Empowered consumers that are demanding better services
- The change of clients needs as wealth passes into the next generation
- Technology, which is described as a driver of change, given its disruptive nature, not to mention the fact that it creates distrust among the most traditional structures of major financial entities.
In order to respond to all those agents, some private banks and wealth managers tend to commit to a ‘digital transformations’ as a solution. These tasks are often relegated to IT and marketing departments, without proper prioritisation by the leadership of the institution. This behaviour tends to be the product of an understatement of what it means to ‘go digital’ — it is often reduced to the development and implementation of a mobile app, rather than a true shift in the mentality within the institution.
The article stresses that strong leadership and commitment are both essential. The fast changing background, combined with the need to accelerate how wealth is managed to be able to keep up with those changes, make transformation a crucial necessity that can best be reached by means of selective transformation. This consists of prioritising focused initiatives that are already implemented and typically show short-term results.
In this way, the institution is able to lower risks, and to pivot between design and implementation of digital solutions. The success of early-focused initiatives also boosts confidence, and helps to eliminate scepticism around new solutions.
With all that in mind, it is also important to know that the supply of solutions is better than ever. Among the most relevant solutions, the article mentions automation, payment solutions, data, IoT, and costumer interaction. Many of these technological and business solutions have now matured enough in some sectors of the financial industry, and are capable of offering growth and space for innovation within wealth management institutions.
To conclude, Synpulse stresses the importance of having vision when implementing focused initiatives, as well as the key importance of fostering an organisational environment that embodies an innovation culture within wealth management institutions.
To read or download (PDF) the Synplulse article – Accelerating Digital Wealth Management – click here.