The environment Wealth Managers find themselves in is changing. Wealth managers are increasingly struggling to maintain their profit margins. That is why they have changed their attitude to wealth management in general. They are increasingly extending their offerings to the lower end of the wealth range. However, low-interest rates are preventing them from earning money since mass-affluent customers require the same level of service as high-net-worth individuals. Wealth managers are struggling because they are unsure whether this isa retail-like or a high-net-worth individual market. In truth, the real market lies in between these sectors and needs to be seen as distinct; with elements of investment advice and customer engagement automation. The problem is that many wealth managers do not have sufficient support or the proper platforms to come to the aid of the mass affluents. The sector must expand into the digital age. In the last four years, the number of Wealth Managers who say that the digitization of their industry is essential to provide customer service enhancements has increased by more than 64% and is still rising.
Pre COVID-19 the digital wealth-management sector could describe itself as a pioneering one. The adoption process of new technologies lagged behind other banking sectors like retail banking. This was characterised by the clients being older - the direct relationship being a vital aspect of the service in a complex product landscape.
Times have changed - the Wealth Management Sector needs to catch up fast! We stand in front of a global shift to digital in all aspects of life. Due to the global pandemic, most of us are working from home and connect to our work and consume our services online. The demand for digital wealth management is rising and clients expect to experience no less of a relationship or service.
Including innovative technologies in a transformation is becoming more the focus of the wealth and private banking sector. On a global level, wealth managers recognize the use of Artificial Intelligence (AI) as one of the critical steps to further growth.
Automation used to focus on back-office and settlement activities. More and more, customer goal planning and advisor interactions are being assisted and enhanced by automation and AI. Increased personalization of products will be critical.
In the mass-affluent sector, clients have precise demands and particular ways of interacting with banks. To provide a truly personalized service, AI can add real value. Customised services are a lot more than products, they involve products, but they are centred around product relationships with the human touch.