Three Critical and High-Impact Areas WealthTech Influences

Technology continues to have a considerable influence on financial institutions, wealth management firms, advisors, and their clients.

In just a few short years, the financial services and wealth management industry has gone through what feels like a decade worth of transformative changes.

The good, the bad, the ugly—the industry has certainly seen the full spectrum over these last few years.

One significant constant, however, has been technology’s role in providing firms and advisors with significant operational, compliance, and client experience advantages. Technology has continued to be a driving force when it comes to influencing strategic decision-making and enabling advisors to scale their practice, when implemented correctly, of course.

What has changed, with respect to technology specifically, is the pace at which innovative technologies are being implemented and adopted across organizations—we have seen a tremendous incline in the adoption curve with technologies being rolled out as competitive advantages for financial advisors. 

Below are three (out of several) critical areas where technology continues to have major influence and drive material impact for wealth management firms.

1. Technology is Enabling Client Experiences

The first high-impact area of WealthTech is all about enabling client engagement and experiences. This one tops the list for good reason(s); importantly, it influences every other component within wealth management.

Client experience and engagement serve both a major challenge and opportunity for every firm and financial advisor. With shifting client experiences and the impeding generational transfer of wealth, creating that “optimal” experience for your clients should be top of mind, always.

If your firm is in pursuit of offering differentiated value, which should always be the case, then you will want to heavily invest in this area.

While there are several paths to success to enable a solid client experience and improve advisor-client engagement, there are a few areas that stand out such as:

1. Delivering personalized solutions and client experiences
2. Providing your clients with access to information (and not just when they chase you down for it)
3. Creating a smooth onboarding experience from the very first interaction
4. Delivering advice, support, and value before, during, and after products have been “delivered” to clients

Really, this component is all about putting your clients first, establishing the rules of engagement, and making it easier for your clients to do business with your firm and your advisors.

A well implemented technology stack makes it not only possible, but much easier to deliver a simplified, personalized, value-added experience for your clients.

It is important to always remember this; trust is the ultimate currency—when you are managing people’s financial lives and their future, this could not be truer.

Advisors who build trust with their clients by way of enabling client engagement will be the ones who benefit by winning the hearts, minds, and wallets of their clients.

2. Automating Advisor Workflow

One of the (many) reasons firms and advisors find themselves competitively disadvantaged is because of the legacy systems and processes implemented that lead to inefficient workflow for not only advisors, but for their team and assistants as well.

We have seen it firsthand; money managers, financial advisors, insurance agents, family office managers, you name it, struggle daily because they are constantly bogged down with the manual administrative tasks and regulatory requirements they are obligated to fill. Fortunately, technology exists to augment, automate, and integrate workflow.

A few examples of workflow that takes place day-in and day-out include:

➜ Collecting, organizing, filing, and storing client documents

➜ Sharing newly added resources and materials with advisors, staff, and clients

➜ Creating and maintaining security and compliance checklists

➜ New client onboarding and account openings 

Deeper, bidirectional integrations, as an example, are being used to repurpose and sync data, prefill forms using the information you already have, automatically file and distribute advisor and client documents into your secure digital vault, consolidate and acquire information, and so forth.

Ultimately, automating advisor workflow boils down to streamlining efficiencies across the gamut of daily activities and administrative burdens that help firms and advisors increase their capacity so that more of their time can be spent on what matters—driving new business and spending quality time with existing clients longing for an engaging experience.

3. Enhancing Information Security and Compliance Capabilities

Increased regulatory scrutiny across multiple fronts, growing practice management concerns around insecure document exchanges and document retention policies, data breaches, fines, and costs associated with non-compliance, all add to the complexity and challenges advisors, and importantly compliance teams, are faced with.

Without pointing out the obvious, the COVID-19 pandemic accelerated regulatory and compliance pressures to protect corporate and client data while handling most back and middle office tasks in a digital-first world.

When you consider the impact and significance the above has on daily operations and building trust with clients (referred to earlier), there is no wonder why spending on compliance programs and technology remains one of the largest investments that firms will make in any given year.

Overcoming the many challenges associated with these regulatory measures means technology is table stakes. According to experts at Harvard, technology is what will help institutions and firms “more cost-effectively meet regulatory requirements” — making the playing field between existing institutions and new financial innovators more level.

Remember, spending on compliance is not an expense; it’s an investment to protect your firm, your advisors, and importantly, your clients.

Leverage Critical (and Emerging) Technologies

When looking across the industry, it is clear to see that institutions and firms will continue to leverage emerging technologies to enable high-impact business processes and drive scale at every level of their organization from their back office straight through to client interactions and household experiences.

Digital transformation affords firms and advisors everywhere with competitive advantages to scale their practice and win the hearts, minds, and wallets of their clients.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Technology