Wealth Management in 2022
The key trends in wealth management (especially in wealth tech) throughout 2021 and 2022 were heavily slanted towards Covid-related challenges. Rapidly introduced ‘Work from home’ requirements and the closure of bank branches and offices worldwide led to some truly innovative remote delivery solutions and a laser focus on all things related to ‘CX’ or Customer Experience. As we look ahead to what 2022 may have in store, we expect to see this focus area remain. Many banks and wealth managers were already giving their channels, delivery and CX solutions a much-needed overhaul – in many ways, the rapid onset of Covid-related challenges only sought to speed up the process.
What other trends may we expect to see in the wealth management space over the coming months and where are wealth managers looking in order to create a strategic advantage? Whilst the following list is far from exclusive, these are some of the key topics that our customers are discussing with us and represent what we feel are current significant areas of interest.
Digital & Hybrid Models
The new generation of clients is looking for self-service banking channels, accelerating the need for banks and wealth managers to offer streamlined, frictionless experiences via mobile apps and virtual branches. New wealth managers provide remotely compliant and compelling services, reducing operational costs significantly.
The growth of cloud-based and cloud-hosted infrastructure accelerates as local legislation on security, ownership, storage, and customer data transmission becomes more precise and defined. Wealth managers and banks are keen to leverage the power of their data for AI-related applications to reduce cost and increase flexibility.
The extensive use of data and AI solutions is driving hyper-personalization. The ability to leverage data in a structured manner is helping banks and wealth managers to understand clients and create insights that may lead to semi-bespoke proposals – that will at least make a perception of a unique, tailored offering.
Wealth managers shall meet the needs of digitally native clients with a transactional investment approach while not alienating the older generation that still holds the wealth. A hybrid model is needed to meet the needs of older customers and offer sufficient appeal to the younger ones achieving a smooth transfer.
ESG related issues will play a significant role in the performance of many global companies. Technology companies can work with third-party data providers to enable the rapid introduction of capabilities to enable wealth firms to manage fully compliant ESG services for their customers. Screening capabilities and strong constraints engines can help to ensure compliance.
The demand for digital assets grew in 2021. ETFs focused on peripheral industries saw increased subscriptions, and wealth managers formed partnerships with custody providers, trading platforms, and other niche industry players. While the most heavily regulated entities will likely maintain some concerns, accommodation may need to be made to protect existing client wallet shares.
Cross Segment Platform / Streamling
We continue to see demand from existing clients seeking to leverage their solution to service additional customer segments and new customers wishing to service multiple segments with a single solution. A single solution can offer tailored products to different segments, enable greater efficiency and significantly lower operation and maintenance costs.
Wealth Management Specialist, APAC, Temenos
Eric Mellor is a wealth specialist at Temenos, responsible for bridging the gap between customers and vendors, working with banks to define their wealth management goals and ambitions and translating these to practical, effective technology-driven solutions.
Eric has 20 years of experience in wealth management and has held various international wealth and asset management positions in the UK, The Channel Islands, Hong Kong and Singapore. Prior to Temenos, he held leadership roles at Avaloq and HSBC and has worked in both client-facing advisory roles and investment and asset management positions.
Eric holds multiple advisory qualifications in the UK, Singapore and Hong Kong, the CFA Investment Management Certificate and a First Class Bachelor of Arts (Hons) in Financial Services from the University of Portsmouth.