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WealthTech 2022: The view from SideDrawer

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You have more stuff than you think. It can be daunting to organize all your financial documents, assets, identity and important everyday life documents. Thinking about how to securely store and share your information, track who it is shared with, and trying to gather and manage all your information from...

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by SideDrawer
| 08/04/2022 06:00:00

In conversation with Ali Qureshi, Co-Founder, SideDrawer, on the technology trends in wealth management in the year ahead, taken from The Wealth Mosaic's recent WealthTech 2022 Report

Year in review

What would you highlight as the main technology themes for the wealth management sector in 2021?
In 2021 we saw lots of concern about sensitive data, how it travelled and was stored. The whole security issue was brought into sharp focus by a series of hacks, some of which were major.

Asset allocation also became a prominent theme. The emergence of crypto as an investible asset and the younger generation’s interest in non-vanilla assets brought about debate on how to best incorporate new investment types into a portfolio in a sustainable and risk-appropriate way.

Why were those themes relevant in 2021 and what progress did wealth managers make in response?
From the advisor perspective, implementing many things that had been started in 2020 - this was mainly around digital transformation. The way the advisor and client communicate and deal with each other. It has become much more about best practices rather than hastily cobbling things together in response to the pandemic.

Indeed, clients have reacted well to digital transformation, and there is a desire to see more, specifically in terms of business practice, digitization which actually drove growth, efficiency, and productivity all from harnessing digital.

Year in review

What would you highlight as the main technology themes for the wealth management sector in 2022?
We see a move to actual implementation. This is particularly striking with client relationship management (CRM) systems becoming fully embedded into the overall architecture. Security is also at the forefront of peoples’ minds. It will move closer to the top of the list because we continue to see breaches. We are also all working from home in one form or another, which raises the level of security that the organization needs.

Why have you highlighted those themes and what do they mean for the wealth management sector?
Adapting old processes into the digital world is not always easy. An initial interaction with a client would have been a physical meeting with an exchange of paper documents. We found clients looked at the available digital tools and tried to adapt them to their existing processes. But now, the conversation has shifted, and people realize they need to rethink their entire process. Indeed, it is the process that is causing the bottlenecks! We help advisors rejig their processes to get efficiency and maximize the tech tools they have already put into place. For example, getting quality data into the CRM system allows better client visibility. That leads to great service and also reduces the administrative burden on the advisor.

How should a wealth management firm tackle these themes and what targets should they set?
Advisors should be thinking about client engagement and how to best help their clients. One way to do this is for vendors to work together to offer advisors joined-up solutions.

We work with a mortgage provider. It has a streamlined application process, and the resulting documentation can be shared and stored on our secure platform, for example. We are also facilitating educational seminars for advisors who might then like to take advantage of the streamlined application process and our secure storage and collaboration tool.

Market status

Where is the wealth management market in its technology journey and what are the industry’s strengths and weaknesses in its use of technology?
From a vendor’s perspective, interest levels continue to be high due to the tech catch-up that needs to happen in so many wealth management firms. However, there are so many priorities, and it is hard for wealth managers to decide what to fix first and what should wait. Firms that have prioritized technology adoption are now seeing faster client conversions and better retention levels.

In terms of adopting and making the most of the technologies available, what are the main challenges wealth managers face and how can they overcome those?
The obstacles are a combination of legacy architecture, people and culture, and budget and priority. If you are looking at smaller businesses, then budgetary constraints are usually the issue, but with larger firms, a suite of competing issues means that some things simply have to wait.

What are the main building blocks for any wealth management firm in making the most of the technologies available to them?
A modern and capable wealth manager must firstly have a good CRM. It must have marketing capabilities and good communications tools. From a storage and collaboration perspective, there must be a secure platform and a fully compliant repository that can be permissioned according to need.

A robust financial planning tool is also a significant value-add. It’s a function of the trend towards full holistic financial planning, including estate planning.

Focus & solutions

Considering the themes identified, what is your role and what does your business offer to support wealth management firms?
Our proposition is a secure and compliant means to share and store documentation. We are seeing huge growth in demand for this in the post-Covid era when people want to work remotely and share documents with others, be that family members or other relevant professionals. Doing this securely in an age where data theft is rife is becoming even more critical.

We are in North America and are also engaging with a few clients in Europe.

How will your firm further develop its offering to support the evolving needs of the wealth management sector?
The industry is moving towards a more holistic service. It is no longer just about the investments; estate planning is also now commonly provided too. Adding on new areas means adding in new skills in terms of the professionals who can help and thus need access to documentation.

From an enterprise perspective having the means to share and store documentation appropriately and securely is a significant value add. The solution can be provided as a turnkey product or completely embedded into their existing environments using our APIs and SDKs.

This article is from The Wealth Mosaic's WealthTech 2022 Report. Access the full report here.