Wealth management is booming. PwC predicts that global assets under management will double by 2025 to $145.4 trillion, with much of the growth coming from the mass-affluent market.
This is good news for an industry facing increased competition. Indeed, the recent Forbes Insight and Temenos survey AI and The Modern Wealth Manager revealed that 67 per cent of European wealth managers believe that attracting and retaining mass affluent clients is a top goal. The challenge is to do so profitably. This is where digital wealth technology comes in.
Technologies such as robo advisors help provide the highly personalised, 24/7, multi-channel services that clients demand in this increasingly competitive sector. They also streamline investment management and automate straight through processing, bringing down the cost of wealth management services so they can be offered at scale.
That's not all. Critically, robo services allow banks to deliver better client outcomes. By quickly learning risk tolerance and investment goals a robo advisor delivers better customer insights, facilitating a more appropriate allocation of assets. This helps cut risk and provides a better customer experience. Robo advisors can also perform order management and portfolio analysis.
But robo advisors aren't limited to the mass-affluent market. For wealth managers working at the top end where personal relationships are highly valued there are hybrid business models where robo supplements rather than replaces human advisors.
Given their flexibility and reliability it is no surprise that wealth managers are increasingly turning to robo advisors. According to the Temenos and Forbes Insights survey 46 per cent of European respondents believe robo advisors will become key to their businesses.
"Temenos' Robo-Advisor can be used across the range of fully automated, hybrid and digital advisory service levels (from mass market to HNWI client segments) to automate the investment management process and offer an enhanced customer experience," says Jeremy Boot, Senior Product Manager at Temenos.
Robo-Advisor, part of Temenos' WealthSuite, is a set of packaged AI-based algorithms for automated investment management including client profiling, asset allocations, rebalancing and portfolio analysis.
WealthSuite provides multi-channel, 24/7 real-time support and allows advisors to automate time-consuming compliance and back-office functions.
Co-authored by Aggie Anthimidou, Product Marketing Lead, Wealth