28th of July 2025 – In the rapidly evolving world of wealth management, where client expectations are rising and competitive pressure continues to intensify, the back-office is stepping into the spotlight. Once seen merely as a cost center or operational necessity, the back-office is now a strategic enabler—central to delivering efficiency, scalability, and increased competitiveness.

But while the case for modernisation is compelling, execution remains complex. Wealth managers face an urgent need to still aligned with regulatory demands and transform their operational capabilities, even as short-term cost pressures and legacy systems present formidable challenges.

Mounting pressures, shifting priorities

Wealth management firms are navigating a perfect storm: inflationary headwinds, market volatility, and a talent crunch are tightening margins across the board. At the same time, clients increasingly demand personalised services, seamless digital experiences, and round-the-clock access to their portfolios. In order to meet these demands without increasing operational costs, these firms will need to scale up their automation efforts. This will prepare operations for business transformation and enable the workforce to support processes within a technology-led operational framework.

According to recent data and surveys, 57% of leaders in banking and investment services across the globe identified the modernisation of business-critical systems and capabilities as their top priority. This was followed by improving operational efficiency and enhancing data and analytics capabilities, both of which were identified as priorities by 37% of respondents. These priorities indicate a growing awareness that outdated systems and disjointed operations are no longer fit for purpose in the modern business landscape.

Interestingly, while modernisation ranks highest in importance, it also ranks lowest in execution confidence, with only half of respondents confident in their ability to deliver on it—underscoring the scale of the challenge ahead.

Streamlining the core: straight-through processing in action

Automation lies at the heart of back-office transformation. Firms are investing more and more in technologies that can enable straight-through processing (STP) across their value chain, from order and execution management to settlement and reconciliation. The benefits are substantial: reduced operational costs, faster processing times, fewer errors and more efficient regulatory compliance.

These improvements not only create internal efficiencies, but also enhance client outcomes by enabling more accurate and automated reporting, faster transactions, as well as reducing the time it takes to bring new products or services to market. They also future-proof operations, ensuring they remain compliant and adaptable as regulations evolve.

The technology investment landscape: AI, cloud, and data

Technology is no longer a back-office support tool; it is the operational backbone. Wealth management leaders are prioritising three major technology domains in their back-office transformation strategies: GenAI/artificial intelligence (AI), cloud infrastructure, and data analytics.

AI plays a crucial role in automating routine tasks, predicting operational risks, and delivering intelligent insights for decision-making. In the back-office, it can enhance fraud detection, streamline compliance workflows, and optimise client reporting processes.

Cloud infrastructure, meanwhile, is seen as essential for scalability and resilience. Migrating core systems to the cloud reduces hardware costs, improves deployment cycles, and enables real-time data orchestration across internal and partner ecosystems.

Equally important is data analytics, which empowers firms to extract deeper insights, improve forecasting, and personalise client services—turning raw operational data into a strategic asset.

Portfolio accounting leads investment priorities

Among specific back-office functions, portfolio accounting stands out as extremely important according to 73% of leaders in banking and investment services, but only 35% of them have already fully deployed such critical capability.

Other core systems are also in focus, though with slightly lower current deployment levels, such as order and execution management (24%), and post-trade settlement and reconciliation (19%). These functions are ripe for automation and can significantly benefit from end-to-end integration across systems.

Build, buy, or partner? Deployment flexibility matters

Firms are also reconsidering how they source and implement back-office technologies. There has been a clear shift away from in-house development towards more flexible scalable deployment models.

Industry benchmarking data shows that more than 70% of firms are trying to navigate the complexities of legacy systems and undergoing system replacement and operating model rethink. Firms are opting to deploy modular functionality in a phased approach and looking to outsource certain functions to aid operational efficiency and improve scalability. For example, there is a clear shift to adopting Software-as-a-Service (SaaS) whose advantages include hosting, application management, software upgrades which sit with a technology partner. Firms are also considering outsourcing their back office functions in their entirety so they can focus more on investment management and client service and ideally utilise the economies of scale from a technology partner which should also translate to greater operational efficiency. In short, there is no one-size-fits-all approach but with the right architecture and operating model (both of which may be implemented in a phased approach), and supported by the right partner, firms have an amazing opportunity to enable greater efficiency, growth and client outcomes.

Partners who offer modular, composable and co-designed solutions with hybrid deployment options are best positioned to serve this evolving market. Customisation, interoperability, and support for iterative rollouts have become decisive factors in technology vendor selection.

Beyond efficiency: a strategic reframe

It is important to view back-office modernisation not simply as a cost-saving exercise, but as a foundational shift in how wealth management firms create and deliver value. A streamlined, intelligent back-office enables:

• Scalability: firms can grow without a proportional increase in costs, workload or infrastructure.
• Agility: new products and regulatory requirements can be incorporated quickly.
• Client-centricity: real-time data and integrated workflows improve the client experience across digital and advisory channels.
• Resilience: automation and cloud-based systems reduce operational risk and enhance business continuity.

Building the foundation for long-term advantage

The modernisation of the back-office is no longer a matter of ‘if’ — it is a matter of ‘how fast’. Wealth management firms that invest in automation, data-driven workflows and scalable infrastructures are positioning themselves not just for survival, but for leadership in a competitive, client-driven industry.

Embracing straight-through processing can boost efficiency, saving both time and resources. Automated administrative processes maximise productivity by freeing teams from repetitive tasks, enabling them to focus on higher-value activities. The results are tangible: reduced costs, shorter processing cycles and a stronger position in an increasingly crowded market.

Modernisation also strengthens the core pillars of trust and compliance. Enhanced data accuracy, streamlined audit trails and automated controls help firms to reduce operational risk and ensure regulatory compliance. This is particularly important as clients not only demand better service, but also greater transparency and accurate reporting; including reliable portfolio income and tax reporting packs.

Most importantly of all, operational transformation gives wealth managers the freedom to focus on what truly sets them apart; building strong client relationships and providing excellent service. By leveraging composable architectures and modular deployment approaches, firms can begin the process wherever they are and scale up at their own pace without disruption.

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