Putting the uncertainty to one side, this year has also given both wealth managers and technology providers alike a unique chance to take stock and analyse what has worked well during the pandemic and what improvements could be made. This represents a great opportunity to review the current operating model and technology landscape of the firm and make changes to reflect the future of the business.

Within the technology context, home working would have been impossible even a few years ago. Technology has, thus, been a huge enabler; some larger financial institutions are now even saying that it will be the new norm going forward. We have seen that some wealth managers have already embraced digitisation as part of their culture and technology landscape and have been well placed during the pandemic. They have been able to continue to provide a positive client experience and kept their service levels working seamlessly and delivered them remotely.

This will play well into the evolving intergenerational wealth shift, something that is high up on the agenda for all wealth managers. But the challenge will be meeting the needs of future and current wealth holders alike.

Indeed, it is important to remember that for many firms, their client base is still largely mature and they are used to visiting their wealth manager for a meeting or a lunch.

COVID-19 has forced a change and we have seen that communicating over Zoom, Teams etc. has not actually been as conceptually and culturally hard as it might have been. So in this way the pandemic has been a catalyst for change and made remote meetings and communications more acceptable. People have generally adapted well and some have even relished the opportunity to do things differently. Technology has enabled this.

Operational enablement
Technology has also proved its worth for the wealth manager’s own operational structure and ultimately needs to do its job as well as be ultra-secure and work efficiently. It is important for firms to be constantly looking for changes that are needed to meet business and client needs as well as the processes that underpin them. Cost efficiencies will be welcomed by all firms and changing to a cloud based, SaaS model may be beneficial for the market.

Quick wins in digitisation may come from client onboarding, KYC, CRM and other client touchpoints. Other upcoming requirements will be around the need to provide ESG investment overlays as standard as well as being able to show that the wealth manager as a business is operating sustainably and ethically. The role of Artificial Intelligence and where it should and could be used is also under discussion; wealth managers will almost certainly consider applying AI to some parts of their model to allow for more cost effective and efficient ways of working.

Technological advances have again come at the right time when it comes to operational integrity. An API-enabled approach allows for a component based model where the wealth manager can pick and choose the elements that they require and add to them – thus creating their own “ecosystem”.

The component-based approach also feeds into the possibility of outsourcing certain operational and technology functions which specialist vendors can deliver. This works well because vendors also take care of maintenance, upgrading and upscaling thus leaving the wealth manager free to focus on client needs and the firm’s core capabilities. The inflection point to do this has now been reached. Wealth managers are embracing outsourcing more now than in the past and, in most cases, leveraging a component based approach can mitigate risk.

Vendors
The landscape for technology vendors both large and small is positive. The move to a component based approach has encouraged a culture of collaboration where vendors can play on each other’s mutual strengths to each provide their own part of the ecosystem and also be fully aligned with each other. This strategy can work well for wealth managers wanting to deliver digital solutions without having to replace the whole of their legacy technology infrastructure.

FinTech and RegTech companies that have got their niche right will do well within this model and they also tend to have a collaborative culture engrained. This is based on their recognition that no single vendor can be all things to all people and they employ a niche provider business model from the start. An API-based platform that has many best of breed components can then be integrated into the core system where the wealth manager needs to perform a large variety of calculations for a variety of audiences and thus needs robust data feeds from all of the components.

The pandemic has proved that new ways of working are possible and has highlighted areas that still need attention. This is the time for firms to be reviewing their operating model and taking a strategic approach to determine what should happen next in line with their business vision. The approach should cover where investments are to be made, outsourcing partners sought and, in general, how to best take advantage of technological gains to maximise the business opportunity.

The market very much needs a place to make sense of it all and understand what is on offer from vendors and how that fits into the overall ecosystem to meet the business needs going forward. This report aims to do that by providing a resource that looks at both track record and innovation and fitting that into the context of an innovative evolution of needs.

Click here to access the full UK WealthTech Landscape Report 2020.