2019 Trends: Digital Strategies for the Future of Wealth Management

Dec  17 
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Tirdad Shojaie  SVP, Product Management, Marketing & Strategy, Investment Services, Fiserv 

There's a changing tide in wealth management. Looking toward an increasingly digital future, financial institutions are emphasizing meaningful strategies that help financial advisors and investors improve workflows and simplify their lives. Moving forward means rethinking the operating model that defines the client relationship, providing digital services that are intuitive, personalized, and real time.

For their part, financial technology providers must be able to support those capabilities via a built-in integrated user experience layer. Financial institutions should also have the choice of leveraging an API infrastructure to control the user experience and offer exceptional service.

With that in mind, here are four wealth management trends we see shaping the market in 2019 and beyond.

1. Holistic and Personalized

To stay innovative, financial institutions must keep pace with consumers' needs and changing expectations. Investors are financially savvy and looking for the same type of digital experiences available to them in retail and entertainment channels. They want and expect accessible, easy-to-use digital offerings that give them a full view of their investments and finances, plus convenient ways to manage and move money in pursuit of their goals.

As a result, financial institutions and advisors will need to expand beyond a financial-assets-and-liabilities mentality, exploring opportunities for deeper conversations about aspirations and goals that include personal health, leisure, estate planning and long-term care. That directly correlates to the need for financial advisors to transform their operating model closer to a life coach.

Investors are demanding more transparent products and services as they play an increasingly active role in managing their wealth. Whether the need is for holistic financial planning or help with the care of aging parents, paying for education or finding the optimal way to rebalance a portfolio, a 360-degree purview can help engage an increasingly diverse investor base.

Today's investors have come to expect personalized service as well as on-demand digital engagement. That requires financial institutions to better understand the needs of their clients and advisors.  Whether providing self-service capabilities or a combination of digital and human engagement, the goal is always a better, more personalized customer experience.

2. Advice in a Collaborative Digital Channel

New client tools at the disposal of financial advisors, such as digital advice, are helping to make advisors more efficient and freeing their time to build stronger client relationships. Whether an individual is just starting to invest, part of the mass affluent demographic or a well-established investor, digital tools provide a way to assess financial health and plan for long-term goals. Clients have come to expect any time, anywhere digital solutions to manage their financial lives – ones that enable collaboration and provide an optimal user experience.

Financial institutions and advisors will need to expand beyond a financial-assets-and-liabilities mentality, exploring opportunities for deeper conversations about aspirations and goalsDigitalization brings the potential for greater transparency and advisor collaboration, as well as greater ease and convenience. Education and financial literacy are areas where technology can help reduce friction and provide insight into spending and saving. By analyzing patterns, advisors can recommend the best course of action.  Advanced algorithms can uncover insights and foster more relevant in-person discussions about financial life goals, ultimately helping advisors provide better collaboration and guidance.


3. The Rise of AI and Robotic Process Automation

There is a lot of excitement surrounding artificial intelligence (AI) and robotic process automation (RPA), including their ability to drive further automation in wealth management and provide a better investor experience.  Those advances will change the way money is managed and how advice is received. Using intelligent algorithms, RPA can automate wealth management tasks that are repetitive, labor-intensive and prone to human error, freeing up time for deeper, more meaningful investor engagement. Examples include efficient client onboarding and financial planning, as well as trade processing, reconciliation and financial reporting.

Together, those technologies will drive tremendous increases in productivity and efficiency, unlocking new sources of value. Among their benefits, RPA and AI will improve accuracy and lower costs. For financial institutions, advances in machine learning and AI will also create opportunities to expand customer relationships and build trust. The largest banks already employ voice-enabled machine learning to offer tailored suggestions for customers to improve their finances.  In the future, AI has the potential to completely transform the way we interact with the systems that govern wealth management.

4. The Formation of a Wealth Management Ecosystem

Digital interconnectivity is beginning to morph into full ecosystems, which is where we see the future of wealth management.  At its most basic level, an ecosystem is a place of interaction and commerce where content and services come together. A wealth management ecosystem may begin with industry connectivity, but quickly brings wealth management capabilities together from a platform to create a coherent way for market participants, financial institutions, sponsors, asset managers, advisors, custodians and others to reach contractual agreements and do business. That is vital for an industry looking to go beyond traditional methods of gathering assets.

Though it doesn't exist today, a wealth management ecosystem will provide a single environment for all digital capabilities and APIs, empowering participants to easily transact, integrate and establish services while scaling at a much faster rate.

Charting a Course: Capability as a Service

Further technology changes will be required to support these trends in 2019 and beyond. Unlocking and monetizing data will be at the forefront for financial institutions, especially those that are developing a digital strategy and sharpening algorithms to mature robotic process automation and further advancements in machine learning and AI.

The key to creating an optimal digital experience will rely on access to financial data and the industry's collective evolution to platform-as-a-service and ready-to-integrate API-driven technology. Delivering wealth management capabilities via a single platform through open APIs will ultimately allow financial institutions to offer a seamless, unified and interactive experience that is better for investors.