How could tech change wealth management in 2024?

A financial technology firm has shared changes that wealth managers can make with technology in order to improve their client offering.

Francois Denimal, managing director, capital markets for APAC at global fintech firm FIS, said wealth managers are “feeling more pressure than ever” to meet their customer demands. 

In order to achieve this, they are embracing technology and refining their software solutions as well as considering the use of artificial intelligence (AI) in their business. 

The firm’s Global Innovation Report found that 60 per cent of executives at companies who were early adopters of technology felt they face less risk now than in the past. Over half of the firms said they intend to build or adopt technology to mitigate risk in the next 12 months, with financial services standing out among other sectors for their greater technology adoption.

Financial services companies also view technology as a way to become more competitive, protect their business and deepen customer relationships.

Below, Denimal outlines three trends he expects to see in wealth management this year:

Personalisation

“A major trend we have seen manifest in other industries over the last few years is hyper-personalisation. We expect that it will start to play a more significant role in wealth management amid increasing competition and complexity in client demands. 

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“Broad access to data, powered by new technologies such as generative AI, will enable wealth managers to better optimise their customer journey and help meet their clients’ financial goals in a much more intuitive and user-friendly way.”

Staying fully invested

“With volatile market conditions likely to continue into 2024, the pressure is on for wealth managers to continue engaging their clients and keep them calm, rational and invested in the markets. In a high-rate environment, wealth managers are having to work harder to justify investing in markets that might be delivering a similar return to a cash portfolio, as well as taking on the risk that comes with that. There are, however, benefits to being fully invested, and for wealth managers it’s a case of communicating those to clients.”

Transformative technology

“To unlock new efficiencies, the wealth management firms we work with are also re-examining how they operate. Fragmented legacy systems, inefficient operations and resource management require significant funding and are difficult to adapt to a fast-changing market. 

“There is now greater appetite to outsource certain operational functions to a trusted partner so that they can focus on executing strategic initiatives. This trend is likely to accelerate in the coming year. As the market continues to evolve, transformative technology will be key to supporting scale and managing new complexities in the industry.”