Automation is the first – and often – the only dimension that comes to mind at the mention of fintech and its adoption across the enterprise. This near-unanimous presumption is mostly a result of statistics that are rewriting the narrative of the global economy. Nearly half the global employee functions have the potential to be automated (McKinsey Global Institute, 2017). This explains the rise of Robotics Process Automation (RPA) adoption in back-office functions, as Technical Assistance providers gear up for enhanced deliverables.
Advanced Technology: the new steroids for Wealth Management
At the core of every investment decision lies the belief that the investment in any listed stock is not just another purchase, but a stake in the business itself, to increase profits. And regardless of the school of thought – Value Investing or Speculation – the investment decision hinges on inputs, explicit inputs. This is where advanced technology plays the role of steroids. Data analytics offers unmatched actionable insights at the speed of thought, from a virtually unlimited number of sources to advisers, for precise investment selection suggestions. The dynamic reporting capabilities facilitate advisor-assisted sales with ‘data supported’ decisions, slashing time and costs.
Open Banking starts with APIs and this will take time as the owners of the data need to fully embrace access to data with open APIs that enable third party integration. Yet, API connectivity has thrown open the doors to aggregators, helping wealth management services to gain access to more insights and signals, bridging various applications and systems including older platforms. The tighter data ecosystem helps dispense with the need for slow, error-riddled processes and protocols that more or less strangled resources from a people, process and technology perspective.
Panorama with digital technology
One of the highlights of technology is the ability to get all relevant information on a single screen/sections of a screen with a few clicks. Consequently, Technology permits users to call up and view all relevant details of investments and their status, from any location anytime. The flexibility and convenience provide a feeling of assurance to investors who need not worry about not having the right information to make their decisions. This also explains the preferences of 59% of clients who choose digital to be the channel for advice and tips (EY, 2017).
This is the digital milieu and clients have expectations that are entirely in sync with developments. From an investor’s perspective, isolation from information is viewed as exposure to volatility. In other words, clients need to have the power to check and understand the progress/status of their investments and are happier to rely on self-service technology for most needs, turning to human interactions only when needs remain unfulfilled.
Impact of demographics on technology adoption
The next generation workforce, from a globally interconnected market, will comprise 59% of Gen Y and Gen Z (Statista, 2018). This means that the investors and the employees of wealth management companies will comprise this generation that has little time or interest for processes that are outmoded. Organizations have their task cut out here; the need for implementing the latest technologies is no more a choice but an imperative.
Investors are obsessed with the need for real-time information that can be easily understood, collated and processed from multiple sources, to help them with their goals of short term/ long term wealth acquisition. Big Data, RPA, Data Analytics, and Cloud Computing are the waves of the new tide that are changing the ecosystem, and businesses would do well to stay on the right side of the turning and churning tide.
Three out of four finance executives feel that digital technologies are changing finance functions (Genpact 2018). The bigger players have begun the transition in earnest. Early adopters are predicted to corner better revenue streams, while the late majority and laggards in technology adoption are more likely to face headwinds and be bogged down with a restricted flow of information.
Mckinsey Global Institute: A Future That Works: Automation, Employment, and Productivity, January 2017
EYGM, 2017: Accelerating the transformation of wealth management through digital technology
GENPACT, 2018: Finance in the Digital Age