Technology

GUEST ARTICLE: Data Sparks A Wealth Management Revolution

Henry Eickman 13 March 2017

GUEST ARTICLE: Data Sparks A Wealth Management Revolution

Faced with digital transformation, wealth management firms must move to manage data more efficiently. Robo and data visualization tools are becoming more commonplace as a way to meet the demand of investment firms and their clients.

The wealth management industry, mindful of how digital technology is overturning business models (well, that is the claim by tech’s protagonists) could roll out products and services that might be efficient but also obliterate the human qualities that clients seek. It is also a mistake, arguably, to lazily assume that just because those much-discussed “Millennials” are keen on technology and impatient for results, that they will be satisfied in being dealt with by robots, either now or in the future. The situation could be more complex than that. 

With such considerations in mind, here is an article by Henry Eickman, senior product manager, Investment Services, Fiserv. The item originally appeared under the title Robo Advice and Data Visualisation in Wealth Management, in the news service FX-MM.com. It is reprinted here with permission.

The editors of this news service are pleased to share these thoughts with readers and invite responses; they do not necessarily share the views of guest contributors. Email the editor at tom.burroughes@wealthbriefing.com

Data is driving the digitization of wealth management to the benefit of investment firms and their clients. To meet the demand and expectations for faster, more flexible financial services, institutions are investing in technologies to unlock as much value from their data as possible and to retain and grow their customer base. 

Here’s a closer look at two trends that are igniting the industry.

The power of the robot
Despite the impression that digital or “robo” advising is about cold, hard algorithms replacing human interaction when serving the wealth needs of the mass affluent, the intention is actually to hyper-personalize the process. Consumers today demand service that fits seamlessly into their digital lives and is tailored to them, and will choose financial organizations that can offer low-barrier digital entry points. Being able to access information and advice regardless of the device they are utilizing is essential, particularly as a gateway to a larger platform.

The value robo advice can add to an organization is evident as the wealth management industry becomes more competitive. By filling in questionnaires, organizations can provide algorithm-based investment suggestions and options for customers, which ensure a personalized experience that meets their exact requirements. The disruptive and innovative nature of robo advice is revolutionary and is responsible for introducing an entirely new generation of customers to investing and wealth management. 

Firms investing in digital advice solutions must bear in mind that while millennials are looking for low entry points and expect instant results, they also desire personal advice as well. While robo-advisors make automated recommendations, the technology also gathers data on customers that can feed into personal interaction and tailor the advice that is given to the individual. Unifying customer data and using technology to facilitate wealth management will support the personalized service that consumers demand, and will lead to more satisfied customers and ultimately business growth.

Unlocking value from visuals
Data visualization is more important than ever, as institutions need to be in a position to monitor the effectiveness of their products, strategies and resources in the face of the deluge of data that is available nowadays. Being able to present this information in a vivid and visual context helps business leaders better understand and grasp its significance, analyze and act upon it with greater efficiency and speed.

Wealth management firms need to be able to manage their data effectively, with information around assets under management, account growth, fund inflows and outflows across different time periods, accounts and different managed-account sponsors and managers needing to be presented in such a way so as to enable portfolio managers and wealth advisors to compare and contrast the information easily. 

Ensuring that data is presented in a manageable way for different business areas within an organization is hugely important. For example, asset managers may want to know the effectiveness of their sales groups, while sponsors may want to know the level of their data distribution around managers.  Hosting one central database within an organization with all of this information gives many different users the ability to select the specific information that is relevant to their needs.

Keeping up with digital transformation
Faced with digital transformation, wealth management firms must move to manage data more efficiently. Robo and data visualization tools are becoming more commonplace as a way to meet the demand of investment firms and their clients. Using these technologies allows financial institutions to analyze their performance and offer customers the digital experience they expect.

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