The following article is a brief extract from a white paper by Bravura Solutions’ Director, Product Management & Strategy, Darren Stevens. To view the full white paper click here.
Top 10 trends in the Australian wealth management industry
How social, demographic and technology changes are driving the evolution of wealth platforms
Escalating social and demographic changes to the traditional client base, together with the unabated adoption of digital delivery, are transforming the provision of next generation platforms, products, services and advice across the Australian wealth management industry. Bravura Solutions’ Director, Product Management & Strategy, Darren Stevens identifies 10 major trends and their implications for platform providers.
1. Generational changes and social media: The differing needs of baby boomers, Gen X and the Millennials are pulling the wealth management industry in all directions. Providers are being forced to develop new products and service delivery mechanisms, as well as new approaches to advice. Further, social media – a powerhouse for shaping opinion – must be carefully monitored and managed to promote a positive business reputation.
2. Mobile and digital delivery: Wealth management customers are tech savvy and many are social media natives who increasingly demand mobile, omni channel digital service delivery, 24/7. Providers seeking to cater for all groups, but particularly the Millennials, must employ an agile technology base that can support the rapid and flexible delivery of new channels as they emerge and evolve.
3. Analytics and personalisation: Successful wealth managers of the future will be those who make the effort to intimately understand their customers and deliver highly personalised experiences and user journeys. Analytics and personalisation will require wealth management platform providers to draw not just upon their own data, but data from myriad other sources.
4. Cloud and ‘as a service’: Many wealth management providers struggle to employ the operating environments and skilled staff needed to keep pace with new social, demographic and technology trends. Increasingly, savvy providers will turn to cloud and ‘as a service’ offerings as cost effective alternatives, given that they deliver unprecedented scale and performance on a user pays, needs basis.
5. Changing face of advice: In the wake of recent advice scandals and the Future of Financial Advice (FOFA) reforms, the focus of the Australian advice market is upon delivering the right advice, at the right time, in the right context. As a result, platform providers will be expected to deliver a mix of self-service robo-advice solutions, online information, tools and calculators, as well as online and face-to-face advice.
6. Direct to customer: There is increasing interest in cutting out the middle man in the wealth management space. In the years ahead, it’s likely that strong brands – such as Google and Apple – with access to large customer bases, data and analytics will emerge as the most successful players in the D2C market.
7. Aggregators and other Fintechs: New players are filling gaps in traditional wealth management platforms and responding to customer demand for more holistic solutions. In order to keep their customers inside their ecosystem, platform providers should not be afraid to collaborate with Fintechs or competitors to achieve aggregation.
8. Product and Investment innovation: The wealth management industry is at last showing renewed interest in product and service innovation – particularly in the retirement, wrap and investment spaces. In the years ahead, platform providers must grapple with the technology challenges associated with launching and administering new products and services in a holistic and personalised way.
9. Cyber security, privacy and compliance: Digital and mobile service delivery, third party integration and predictive analytics from big data stored in the cloud, all pose cyber security, privacy and compliance risks to the wealth management industry. Platform providers must thoroughly understand their own processes and systems, as well as those of third parties, and must establish appropriate protection at all points in their business chain.
10. Technology and the ‘Internet of Things’: In the years ahead, wearable technology and ‘smart’ devices within our cars, homes, workplaces and recreational spaces – will all be connected via the internet. This connectivity will deliver the ability to monitor personal behaviours and preferences, allowing wealth managers to intimately understand their customers and deliver more personalised, targeted experiences that better meet their needs.
At the heart of the new world order in wealth management platforms, products and services, is the need for providers to employ a modern technology base. Solutions must be characterised by customer-centric, service oriented architecture and strong core systems with modern integration capabilities. They must support digital service delivery, big data and predictive analytics, real-time straight through processing and seamless, yet secure transactions with third parties. Ultimately, the successful next generation platform providers of the future will be those who gain and retain trust, reduce friction and provide the holistic, personalised user journeys customers increasingly expect.
To view the full white paper click here.