How Wealth Managers Are Using Technology To Understand Their Clients Better

As published in Forbes Insights, July 2019

The dynamic playing out across the banking landscape—from retail to private wealth management—is one where technology-driven offerings and platforms increasingly define the brand and the personal relationships underlying the business.

Temenos – Company

Services have been changing since the arrival of digital platforms and the deployment of technologies like artificial intelligence. Now it’s vital for wealth managers to heed the demands of clients and prospects for platforms and insights that reflect their lifestyle and goals.

How will financial products and services change as a result of AI? To answer that question and others for a new report, titled “The Next-Generation Wealth Manager,” Temenos and Forbes Insights surveyed over 300 wealth management executives and over 100 high-net-worth individuals (HNWIs) about their views on technology.

Almost half (45%) of wealth managers said that financial guidance from data analysis—and insights from the use of AI—will help them refine the advice they give to clients. And 36% said clients will be able to see their investments with greater clarity as a result of AI.

Customer Data

Mobile platforms are changing with technology, and the amount of data coming out of the platforms that wealth managers can use is increasing.

A service provided to clients of U.S. Bank that aggregates external financial accounts allows the institution to get a broader perspective of a client’s situation.

“This allows our advisors to see all those accounts via our CRM, and it refreshes on a regular basis,” said Gailyn Johnson, chief operating officer of U.S. Bank Wealth Management. “It also seamlessly feeds into our financial planning software. So our customers can see their full financial life—and we use a number of AI tools around the data we’re gathering to gain insights into our customers’ financial needs.”

Johnson also points to what-if scenarios that HNWIs can run on the bank’s mobile app to see the impact or feasibility of spending right away, without consultation.

“What if they want to buy a second home or a new car? They can go online and quickly determine how a new purchase would impact their overall financial picture,” she explained. “It’s interactive, and it’s also connected to their advisor, who will get an alert that a client is inquiring regarding their plan.”

Prospective Clients

Eight in 10 wealth management executives in the survey saw technology as being a significant or highly significant factor in whether a wealth manager can gain market share, notably among younger investors, who are rising in importance.

Openbank is a great example of a wealth manager setting up a scalable and customizable digital platform that makes the firm an “all-in-one shop,” said Gonzalo Pradas, head of wealth management at the company, an online native formed in 1995 by Santander that approaches its business by segmenting and grouping its clients by needs and behaviors—not net worth.

“They expect service tailor-made to their lives, and we do it through technology and partnerships,” Pradas said. “We do not want to do everything by ourselves; we’re not good in everything. We have to be good in client engagement. We have to be good in putting the best products and the best services in front of our clients. And for that we may partner up with the best around the world.”

Openbank’s clients have access to a service managed in partnership with BlackRock, for example.

Almost 60% of executives surveyed said that expertise with technology will be highly important for wealth managers to succeed. That’s because technology experts understand how technology can make routine processes, such as onboarding, more efficient.

“Technologies are freeing advisors from those repetitive tasks,” Johnson said. “Now they’re able to spend more time providing specific insights based on what each customer wants to do. It’s really about being more proactive and becoming a life coach who thinks ahead and offers solutions for them to meet their goals.”

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Temenos – Company