Digitisation is needed for wealth managers to ‘totally re-engineer their operations" as millennials are set to benefit from £20bn in inheritance but 80% of wealth managers do not have an existing relationship with these beneficiaries who do make use of technology in all aspects of their lives, including managing their money.
The report entitled ‘The Future Challenges for Wealth Management', reveals wealth managers and financial services companies in general need to prioritise and redefine what can be expected and achieved from digitisation, and make increased use of partnerships with expert solution providers.
Nucoro estimates that on average around 84 per cent of companies fail at digitisation projects. The digitisation of the wealth management sector needs to go beyond simply moving physical into digital, Nucoro says, and fundamentally rethink products from the conceptual to execution.
The report finds that this is being driven by the rise of automation facilitating scalable growth, and the transformation of customers where their expectations, needs, behaviours and demographics are changing.
Wealth managers must embrace technology"
Nikolai Hack, the COO and UK MD of Nucoro said: "As with any investment in a financial business, a central motivation should be to ultimately produce outcomes that can benefit customers. Adopting bolt-on enhancements like digital customer experiences or automations for back office functions are the best routes to upgrading the services to existing and potential clients due to their accessibility, scalability and affordability."
"Wealth managers must embrace technology. The industry is heavily regulated, and it therefore faces a large administrative burden, but technology can minimise the time and resources spent on tasks that are very basic but high in volume."
The report said it is now realistic to consider direct to consumer robo-platforms as legitimate industry challengers. By the end of 2018, they were managing $257bn, and this could grow to $1.26trn by 2023.