A shift towards harnessing the opportunities afforded by speed, automation and hyperpersonalization will feature heavily in 2020, believes Jamie Keen, Country Manager, UK & Ireland at aixigo. Clients are taking integrating their systems, enabling effective end to end processes and the provision of high speed, scalable and flexible solutions to their advisers and customers.
Challenges: What do you see as the main technology and technology-related challenges for the wealth management sector through 2020?
We see a number of challenges but will focus on two topics that we are hearing from the firms we are talking to.
The first concerns UX; broadly speaking there are two firm types facing different tech challenges – those who are yet to modernize, and those who have done so and felt that their work was complete. The former are still in the majority - yet to develop new services to meet the requirements of a younger client generation or use digital communication channels outside of email and phone (video chat, for example, is becoming an increasingly popular method to communicate but is slow to be embraced by wealth managers). There is still way too much reliance on paper and printed reports.
For firms that have upgraded the UX alone, a challenge is that superior UX is now seen as standard for many customers and its value a differentiator on its own is decreasing. Firms now need to look for more innovative ways to improve the offering – UX can´t replace a great investment philosophy, investor desire for ESG / impact investing, thematic investing etc.
In addition, we have seen firms dealing with challenges caused by focusing all efforts on the end-user experience and neglecting the internal user / adviser. Most advisers still use multiple systems - either partly or not integrated - across onboarding, financial planning, risk assessment and reporting - which is inefficient, time-consuming, and creates more points of failure. Investors want simplification & automation combined with human involvement at the right stage, so the adviser needs to be able to engage when and how needed, not lose valuable time working with a multitude of inefficient solutions and processes.
The next big challenge concerns the increasing need for speed and scalability. Customers increasingly expect hyper-personalisation and the delivery of financial services in real-time. Existing portfolio management systems are struggling to deal with increased numbers of portfolios being managed across larger mass-affluent client bases. With ever-increasing regulation and Big Data driving innovation, being able to analyse / optimise one portfolio at high speed is no longer enough; firms need to be able to do the same for potentially tens or even hundreds of thousands of portfolios at once.
Opportunities: What do you see as the main technology and technology-related opportunities for the wealth management sector through 2020?
Firms have a great opportunity to embrace technology in order to empower the adviser as well as the customer. Solutions must be developed to optimize back-end processes and help advisors to undertake more efficient client engagement and personalized investment advice.
Using highly customizable solutions with the latest technology and Big Data allows for the provision of tools that improve the service for both the adviser and the customer. If firms and advisers embrace the digital hybrid model they can provide highly customized advice and solutions, and better understand the customer to increase trust / uncover new revenue streams.
We also see opportunities to provide discretionary portfolio management services to a wider client base than was previously economically viable. With the right software, more customers than ever before can be served through the automated generation and processing of orders, rebalancing and reporting. This will make it much easier for wealth managers to generate additional business with existing customers, and attract new ones.
Market focus: When considering your wealth management clients and prospects, where are they currently focusing their technology investments and resources: clients, advisers/staff or their business infrastructure?
There continues to be a lot of ‘fire-fighting’ as firms continue to get to grips with data management and the task of improving back-end efficiency. Whilst a lot of effort and resource will still be used to address ‘risk’, we are seeing more of a focus on ‘opportunity’, particularly a shift towards improving adviser functionality, either to automate traditional processes, or more frequently as part of a shift towards a digital hybrid solution that will allow the customer to take control of the appropriate elements.
Of course, ‘risk’ and ‘opportunity’ are rarely mutually exclusive, and we are seeing more firms willing to address the two elements side by side.
Excite: When you look at the technology capabilities and resources now available to the wealth management sector, as a solution provider, what excites you most in 2020?
We are excited about the developments we are seeing with genuine artificial intelligence, the use of our technology to harness increasingly important and available Big Data, and the strides forward our clients are taking integrating their systems, enabling effective end to end processes and the provision of high speed, scalable and flexible solutions to their advisers and customers.
We are also excited about helping firms to use technology to adapt to the fundamentally different customer behaviour brought about by the digitalization of services. Not only must many more users be served simultaneously, the frequency of access also becomes much higher. This can quickly lead to a system load that is 100 times higher than in the traditional, non-digital business. In order to cope with this load, a system must be consistently mass-capable - like our API-based platform, which has an average throughput of 3,000 requests per second.
Your support: Finally, as a solution provider to the wealth management sector, what will you be doing in 2020 to help your clients and prospects meet their main technology and technology-related business needs?
To reference some of the points above, we will continue to provide solutions that drastically improve both the adviser and customer experience and the efficiency of the firm, tailored to the exact advice processes required. For advisers, repetitive and time-consuming activities are handled reliably and quickly by the software. For example, this could include calculating an optimal investment recommendation, compiling regulatory documentation and forwarding customer orders. How much should be done digitally and automatically can be decided for each individual customer.
From a speed and scalability perspective, our high-performance portfolio solution takes the raw material data from legacy systems, refines the data and delivers it in a quick, mass suitable and flexible way to all client systems. Our algorithms minimize the unproductive waiting time of CPUs and can perform calculations without delays - this extremely low latency leads to fast response times of less than 10 milliseconds. Even for complex calculations which cannot be precalculated, the system achieves very fast response times of less than 300 milliseconds.
