The past decade has seen unprecedented change in terms of new technology becoming available and the ability and willingness of the wealth management industry to embrace change.

“The difference between the UAE and APAC regions when it comes to the pace of change is much the same,” says Olivier Crespin, Chief Executive Officer of Zand. “This is because the speed of availability of new technology is the same the world over.”

The difference, he says, lies in the degree to which banks have legacy technology and the extent to which they can get up to date and rid themselves of components that are holding them back. The more legacy there is the longer it takes to adapt and integrate new technologies.

“Asia and the UAE are ahead of Europe in this respect as they have fewer legacy technologies and have therefore been much more able to introduce new ones. They are well-used to being agile, innovative and bringing in new bits of technology in a plug and play type format,” he says.

But regardless of geography, all banks now need to take an innovative and agile approach in order to respond to client demand for smoother and sleeker front end systems and to have up to date data and information available. In addition, the train of risk and compliance regulation means that banks need to adapt from that perspective too. “If they do not then the cost of doing business on legacy systems that cannot flex or scale will quickly become overwhelming,” he warns.

Trends
“One of the biggest things that we have seen emerge and become commonplace is the use of robo advisers and we see most, if not all, private banks wanting at least some element of robo functionality. The possibilities evoked by being able to leverage the cloud, having better analytical capabilities to give better portfolio management at a granular level have also gained traction and popularity,” he says.

Both, he says, have played into the general trend for wealth management clients to become much more informed and involved in their own investments and thus require more control, more data and more information around their holdings as well as industry trends. As a consequence, wealth managers need to provide the tools to access esoteric investments, such as crypto, as well as the means to access investment data and give clients the capability to monitor and transact for themselves.

He comments: “Right now we are evolving into a second stage with robos. Where they were previously more important in a premier banking context, they are now being upscaled to more sophisticated clients who want to get more involved in their own financial affairs. This is emerging as a hybrid model where the client has access both to the robo capability as well as the adviser,” He says that Covid-19 has accelerated demand for this because lots of wealth management clients became more technology enabled and accepting of the convenience of digital over lockdown.

Client experience
The hybrid model works because it gives the best of both worlds – the technological means married with the personal touch. Related to this is the greater demand for the availability of client experience tools to make for a better and more fulfilling relationship with the wealth managers. “This is again all around the availability of data and information and the ease with which the client and adviser can connect with each other and be armed with the right data and intelligence at the point of contact - so as to able to quickly react to a communication or message from the client. The adviser needs to be able to see past activity and know what additional needs and products the client might well need at the point in time where the communication has been made.”

Feeding into that is the increasing need to look after the client’s whole of life needs and to do that the wealth manager needs to be connected into an ecosystem which can provide the direct core things as well as the ancillary ones. “Wealth managers should basically be a platform with a banking license and should seek to provide the relevant tools and services around that so as to become indispensable in the client’s life and help them to achieve their lifetime goals,” he says.

In terms of specific technology focus, Crespin singles out the cloud as playing an instrumental part in allowing infrastructure at scale and facilitating the componentisation of applications. This allows a modular and bit by bit approach by wealth managers. “There needs to be the ability to make strong connections and to be able to speedily deploy something to meet needs. This can include AI but there is a time and a place for it and we need to remember that AI becomes incrementally better the more data input there is. So, the build and take up of this will be progressive, not a plug-in solution,” he says.

Crespin thinks that going forward, Blockchain will come to the fore, particularly around areas where there needs to be something instantaneous such as cross border currency transactions. “Related to that is tokenisation of private assets such as real estate which will create a new market through listing in exchanges allowing fractional ownerships of these assets. Non-fungible tokens (NFT), similar to a crypto currency can be used to represent items such as photos, videos, audio, and other types of digital files which can have many possible outcomes. “This is a space to watch. It is already being used in gaming with games like Sandbox where an entire virtual world can be created and tokens are exchanges for real estate and other purchases just like in real life,” he says.

Ultimately though, no matter what the technology, providers and banks need to be able to work together and have a collaborative approach and work in an agile culture to a common end point. “This was the case when building Zand bank. We had team of developers and a team of bankers working to the same common end. Each needed each other’s input to be able to marry together the tech and the banking to create something new. Alignment to the common end is so important and this agile working culture will be marked in successful wealth management companies going forward,” he concludes.

This interview was part of TWM's recent APAC Wealth Technology Landscape Report (2021). Click here to access the full report.