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Data - The foundation of the technologically-enabled wealth manager

By Point Group from the Swiss WealthTech Landscape Report 2024

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by Point Group
| 01/03/2024 11:00:00

Tom Williams, CEO of Point Group, says investment data is the fundamental building block to building the wealth manager of the future.

The wealth and asset management sector’s continued prioritisation of investment in technology is an ongoing trend. However, it is important to note that the true value of such investments materialises only when technology is seamlessly integrated into a well-balanced operating model, encompassing technology, people, processes, and, crucially, data to deliver tangible benefits to end clients.

It’s the data, stupid
Here, the relationship between technology and data is particularly important.

In the realm of WealthTech solutions, investment data stands as the bedrock upon which technological advancements and enhanced functionality should be built. While technology facilitates the execution of processes and delivery of services, investment data serves as the invaluable currency that fuels informed decision-making and the development of trusting end-client relationships.

Wealth management technology harnesses various tools and platforms, but the quality, accuracy, and depth of investment data truly allows the technology to shine. The precise tracking of transactions, comprehensive understanding of portfolio holdings, and real-time insights into market movements empower wealth managers to deliver value to their clients. With this capability in place, managers can develop strategies that align intimately with clients' financial goals and risk appetites, answer questions, and engage their clients in the knowledge the underlying information and data are correct.

In essence, technology provides the means, but investment data supplies the substance, making it the indispensable cornerstone in the evolution of innovative WealthTech solutions and the foundation on which wealth management operating models must be built.

But, despite a decade marked by cutting-edge technology entering the sector, challenges persist, with many innovations confined within operating models plagued by technology and data silos, leading to the persistence of high-risk, unscalable manual processes - the humble, analyst-powered Excel spreadsheet lives on.

By taking a data-first approach to investment management, wealth managers can build operating models that are greater than the sum of their parts, scalable and future-proofed. This treats investment data as the foundational element, then builds the technological toolkit from that foundation. This foundation is centred on an independent Investment Book of Record (IBOR) managed within a robust data architecture, which provides the singular source of investment truth from which to power the required suite of tech tools, enriched with other data sets (client behaviour, etc) to conduct analysis and drive reporting.

A future-proofed operating model
The focus here is on 'getting the data right' as a non-negotiable precursor to selecting the appropriate technological toolkit. Recognising that a single provider rarely provides all the capabilities a manager may require, the best strategy involves constructing integrated modular platforms that can incorporate a changing mix of technological tools over time. This approach supports the creation of flexible and agile wealth management operating platforms, crucial for adapting to dynamic business needs and leveraging evolving technological capabilities such as Artificial Intelligence (AI) and Machine Learning (ML).

This last point is key; as technology develops and innovations such as AI are applied across society and business, the data feeding the AI models is paramount. Whilst this is critical for data of all flavours, if the core investment data on which the value proposition of a wealth manager is based is incorrect or incomplete, no amount of AI wizardry will be able to fill in the gaps.

In essence, this approach positions data as the linchpin in the evolution of wealth management operating models, unlocking the potential for innovation and adaptability in the ever-evolving landscape of investment management.

Interested in reading the full report? You can read this edition of the Swiss WealthTech Landscape Report 2024 online here.