Recovery from the global financial crisis of 2008 was made more challenging by new reg- ulations aimed at preventing a repeat and all the while new upstarts from a burgeoning fintech sector were able to respond to consumers’ digital expectations faster. The pandemic then ampli- fied the need for digitalisation in the private wealth sector. Wealth, in itself, has taken on new meaning, driven by the rise of mass affluent segments in developed economies and a growing middle class in emerging markets. Traditional wealth, as defined by high or ultra high net worth, has also seen major changes through a generational transfer of trillions to mil- lennial and post-millennial generations, who are not only digitally native, but also have different views on money than their predecessors.

Deeper understanding of digital

Digital transformation, albeit much hyped, was previously misunderstood and incomplete. The adoption of “point solutions”, which focused primarily on the user experience and at the frontend, did little for integrated, enterprise-wide digital workflows and operational fabric. True and comprehensive digital trans- formation affects the highest-level strategy, process design, operations and business models. It radically changes the role of people in front-to-back operations and the way they use technology. Improving user interfaces or back-office operational efficiency leaves the institutions partly digitalised, but unable to benefit due to disconnects between functions and business units in their levels of digital adoption. Only full, cross-functional, end-to-end digitali- sation can ensure return on investment and positive outcomes. Gaining tangible value from digital change starts by building a reliable, open and consistent digital business data layer, which empowers clients to access their investment information and provides advisers with relevant, real-time and actionable insights to act on.

Secondly, it requires a digital cus- tomer experience delivered through the optimal channel mix, enhancing timely and personalised interactions anytime and anywhere. Finally, digital must be a new standard, completing the “open wealth” architecture with digital native business processes.

Digital transformation is a journey, not a destination. There is no end state to the required technological and cultural changes; it is a continuous process of evolving capabilities to meet evolving needs and markets. This makes long-term planning a critical priority, road- mapping phased adoptions and transi- tions, and optimising resource allocation for maximum outcomes.

Tech vendors must play a valuable collaborative role in this process and Objectway, a digital wealth and asset man- agement technology and services pro-managers’ strategic digitalisation plans.

All about the customer

The wealth management sector is rediscovering the imperatives of customer centricity. Traditionally providing tailored experiences in a relationship-based business, firms are now adapting to new client expectations in the digital world. The early months of the pandemic were a wake-up call that excellent in-person service is no longer enough and even a well-designed website does not meet diverse interaction requirements. This realisation triggered a catch-up rush to innovate customer engagement with digital tools and solutions. Onboarding new customers is a critical lifecycle event that remains a challenge for most firms and a weak- ness for many. In a recent news release, Objectway reported a Gartner study in which only 26 per cent of advisers said automated client onboarding was available at their firm and just 14 per cent were actually utilising it. Despite the low adoption, 87 per cent of advisers using the technology ranked it as effective. Best-practice solutions include process-oriented client lifecycle management with advanced digital onboarding, combined with optichannel and omni-device portals and native apps for superior user experiences.

Managing wealth remains at the core

While the fundamental objectives of wealth management are unchanged – wealth preservation and growth – the requirements are shifting and increasingly complex. Diminishing returns from tradi- tional investments have increased interest in new and alternative asset classes: from real estate and private equity to cryptocurrencies and tokenised assets.