Rising client expectations, increasing regulatory complexity, and constant pressure on margins mean wealth managers can no longer afford to treat the back office as an afterthought. Global assets under management are projected to surge to nearly US$136 trillion by 2027 (BCG Global Wealth Report 2023), bringing fresh opportunities – but also exposing operational weaknesses that could threaten growth if left unaddressed.
Rethinking priorities in a shifting landscape
The operating environment for wealth managers has rarely been tougher. Inflation, market volatility, and talent shortages are squeezing margins. At the same time, clients – especially millennials and Gen Z – expect personalised digital services, on-demand access and faster onboarding, all without higher fees.
This confluence of pressures has pushed operational transformation up the agenda. According to a 2023 study by a leading global technology research and advisory firm, 57 percent of global banking and investment services leaders identified the modernisation of business-critical systems as their top priority. Improving operational efficiency and strengthening data analytics capabilities followed closely, both cited by 37 percent.
Yet there is a notable gap between ambition and execution: only around 50 percent of executives feel confident about delivering these priorities. This highlights the scale of the challenge — and the risk of falling behind more agile competitors if firms hesitate.
Straight-through processing: turning automation into advantage
Automation is the cornerstone of back office transformation. One of its most powerful applications is straight-through processing (STP), where processes from order management to settlement are executed seamlessly without manual intervention.
The impact is significant. Research from Accenture’s Wealth Management C-Level Survey 2023 shows that adopting STP can reduce portfolio proposal preparation time by up to 40 percent, freeing relationship managers to focus on higher value tasks.
Beyond efficiency, STP delivers:
- Faster reporting and reconciliation, improving transparency;
- Lower error rates, supporting regulatory compliance; and
- Quicker product launches, enhancing agility and competitiveness.
By replacing fragmented workflows with automated, integrated processes, firms can future-proof operations and respond more effectively to evolving regulations.
Technology investment: AI, cloud and data as strategic pillars
Back office modernisation isn’t about simply digitising existing processes: it requires rethinking how technology supports the entire operating model. Three areas dominate investment strategies:
Artificial Intelligence (AI)
AI is proving invaluable for automating routine compliance tasks, detecting anomalies in transactions, and providing data-driven insights to guide decision-making. Capgemini’s World Wealth Report highlights that 54 percent of affluent investors now welcome AI-assisted portfolio analysis, although most still prefer human oversight for final recommendations.
In the back office, AI also supports:
- Fraud detection through pattern recognition;
- Enhanced reporting with natural language generation; and
- Predictive analytics to identify operational bottlenecks before they escalate
Cloud infrastructure
Cloud adoption is gathering pace, driven by the need for scalability and business continuity. PwC’s Digital Banking Survey Switzerland 2023 estimates that migrating to cloud infrastructure can reduce IT hardware and maintenance costs by 20 to 30 percent. Cloud platforms also shorten deployment cycles and facilitate real time data orchestration across technology ecosystems.
Data analytics
Turning data into a strategic asset is now non-negotiable. Firms leveraging advanced analytics can better forecast market trends, understand client behaviours, and tailor offerings to individual preferences—transforming raw operational data into client-centric value.
Ready to dive into the report and discover more about Objectway’s showcase? You can read and download the report online here.
Portfolio accounting: the top priority, yet under-delivered
Among back office functions, portfolio accounting is emerging as the clear priority. A 2023 global assessment by a prominent technology and strategy research provider reports that 73 percent of banking and investment leaders view portfolio accounting as “extremely important”. Yet only 35 percent have fully deployed it.
Other critical systems are even further behind: just 24 percent have implemented advanced order and execution management, and only 19 percent have deployed modern post-trade settlement and reconciliation tools.
This gap, between perceived importance and current deployment, points both to the scale of opportunity and the urgency for firms to act.
Deployment strategy: Build, buy or partner?
Historically, many wealth managers favoured building systems in-house. However, the pace of technological change and the need for faster ROI have prompted a strategic rethink.
Data shows over 70 percent of firms are currently grappling with the complexities of legacy infrastructure, prompting replacement initiatives and a fundamental re-evaluation of operating models. Many are adopting a modular and phased implementation strategy, coupled with selective outsourcing to enhance operational efficiency and scalability.
Notably, there has been a growing adoption of Software-as-a-Service (SaaS) solutions, which are valued for benefits such as hosted infrastructure, managed applications and seamless software upgrades.
In parallel, a significant number of firms are considering the complete outsourcing of their back office operations. This shift is motivated by the desire to focus on core competencies such as investment management and client service, while taking advantage of the economies of scale and expertise offered by specialised providers.
Ultimately, there is no one-size-fits-all transformation model. However, with a flexible architectural framework, a phased delivery roadmap, and the right strategic partnerships, firms can unlock new levels of efficiency, scalability and growth.
Technology partners offering modular, co-designed solutions with hybrid deployment, customisation, and interoperability — enabling iterative rollouts — are best positioned to support firms' strategic transformation.
Beyond cost savings: Building strategic advantage
Firms combining operational excellence with smart technology investment outperform their peers by up to 12 percent on cost-to-income ratios, according to Boston Consulting Group's 2023 report How wealth managers can achieve cost leadership.
Therefore, modernising the back office should not be viewed solely as a cost reduction exercise. Done strategically, it creates multiple competitive advantages:
Scalability: firms can grow assets under management without a linear rise in costs or operational workload.
Agility: new regulations, products, and services can be integrated faster.
Client-centricity: real-time data improves portfolio visibility and personalisation.
Resilience: automation reduces human error, and cloud-based systems enhance disaster recovery and business continuity.
Conclusion: the back office as a driver of modern leadership
The modernisation of the back office is no longer a question of if, but how fast and how effectively. Firms that invest strategically in automation, scalable infrastructure, and data analytics aren’t just keeping pace — they’re positioning themselves for leadership in an increasingly client-driven, digitally enabled market.
Straight-through processing and modular architectures can turn operational complexity into streamlined efficiency. Automated processes free up teams to focus on client relationships, while improved data accuracy and transparency build trust — critical differentiators in today’s market.
Above all, the transformation of the back office is a chance to redefine what success looks like in wealth management: not simply managing assets, but delivering personalised services through a scalable and resilient operating model that reflects both cutting-edge technology and enduring human trust.
Interested in reading the UK Toolkit 2025? You can read and download the report online here.
About the UK Toolkit 2025
The UK Toolkit 2025 report examines the shape of wealth management in the UK today, and how industry participants are responding to the challenges and opportunities of this market. It features 14 articles contributed by a range of industry participants — including wealth managers, vendors, and consultants focused on financial services. It also showcases eight technology offerings relevant to the wealth management industry in the United Kingdom.
Our broader Toolkit Report Series covers thematic, geography and wealth manager segment-focused reports, each tasked with delving into the topics and supporting technologies of relevance to help wealth managers of all types better understand how they should bring technology into their business and in which areas.
Following this third report, focused on the UK, we are publishing:
About The Wealth Mosaic
The Wealth Mosaic is a UK-headquartered online solution provider directory and knowledge resource, focused specifically on the wealth management industry.
For wealth managers, the buy side of our marketplace, The Wealth Mosaic is designed to enable discovery of key solutions, solution providers and knowledge resources by specific business needs.
For solution providers and vendors, the sell side of our marketplace, The Wealth Mosaic exists to support the positioning, exposure and business development needs of these firms in a more complex and demanding market.
For more information, visit: www.thewealthmosaic.com
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