Objectway recently participated in the Third Annual WealthTech Forum in Dubai, where I had the opportunity to give a keynote speech and also head an insightful panel discussion around the topic of ‘Digital Mindset in the Private Wealth industry’.

A keynote on the Changing Landscape of Private Wealth

World economies are experiencing a turmoil, some call a ‘crisis’ or are at the brink of a financial crisis, facing a recession linked to galloping inflation; financial markets have been volatile, to say the least, ever since the start of the COVID pandemic; and by today rollercoaster stock prices have become the ‘new normal’ all happening under inflationary pressures, rising interest rates and recessions, driven by antagonistic politics and tensions (including wars). In this context, the world of Private Wealth is changing, from the redefinition of Wealth (its parallel concentration and democratisation) to the unprecedented inter-generational transfer of trillions of funds to an entirely different younger population. The centre of the debate is that exponential development of technologies brings its own challenges, often exacerbating the above effects, as it helps to counter them. Here is a summary of the key talking points from the panel discussion that followed the keynote speech.

What options have financial institutions to survive this period and continue to grow and thrive?

I stated that there are not many options available to wealth managers and private bankers. The panel agreed that cost-cutting has been tried and done, will always continue but is evolutionary, not revolutionary. Restructuring and ‘inorganic’ growth by M&A is also an old tool in the strategy box but has worked better in ‘normal’ times with declining returns in the current climate. The one choice that continues to deliver sustainable and growing value is Innovation: the combination of vision and actions to see opportunities and convert them into improved outcomes for stakeholders. Innovation, however, does not occur in a vacuum: it requires a collective mindset which works through open dialogue to utilise cross-functional capabilities. Because innovation is often fuelled by abundance of information and advances in technology, I encouraged the panel to speak about Digital Mindset.

What is a Digital Mindset?

I talked about ‘collective mindset’ and encouraged the panel to drill down into the matter to explore more meanings of ‘digital’ and of ‘mindset’. The panel discussed the bearers of the mindset: is it collective (organisation mindset), or that of participating individuals? Or is it only internal for the company or also involves external stakeholders like partners, suppliers and not least the customers? The panel also touched on the perspective of ‘following versus leading’ and concluded that there is a ‘best practice’ mindset to adopt by following the customers’ mindset. Here, adopting a mindset shaped along best-practice models (e.g., studying market leaders and borrowing critical features) increases the likelihood of getting it right. And customer-centric organisations always follow their customers’ attitudes, behaviours and underlying needs. This is also true about innovation. I said that there is a popular parable in business schools and books that Apple’s customers never asked for a phone with a touchscreen and without buttons, but Steve Jobs gave them one nonetheless, and the rest is history.

Instilling a strong ‘learning to learn’ mindset

Legendary management guru Peter Drucker once famously said that “Culture eats strategy for breakfast”, meaning that correct and clever strategies would easily fail without the support of the right organisation culture. The panel transposed ‘culture’ for ‘mindset’ and expressed their views on the importance of a learning culture to support an innovation strategy; the shaping of a learning mindset, the steps and processes in evolving it. Learning to learn is a journey, not a destination and the road is winding and often rough. The learning journey is only fruitful if the company and its people embrace failure as an acceptable outcome and that establishing OKRs will help to recognise incremental improvements.

Leading organisations into the age of data, algorithms and AI

On this particular talking point, innovation is equally valid for ‘businesses and ‘technology’ innovation. In my opinion, it is more about business, as this is where customer value and shareholder value are expected to be created. The panel agreed that wealth managers and private bankers cannot underestimate technology as a major driver of business innovation, where technical innovation in itself creates business opportunities or helps to materialise them. This brought the panel to discuss the quintessential subject of Data, data science and algorithms. The Digital Mindset in itself is data centric, as it supports the creation and maintenance of a data fabric that can be exploited algorithmically and through AI modelling. The panel here shared their thoughts on Data Management and Data Governance and the practices of organisation design and processes related to data harmonization, labelling and classification aimed at exploiting effectively new cognitive services.

Upon concluding the panel, my key takeaway was that companies must recognize in their ‘Learning to Learn’ journey the criticality of data management and of processes related to data harmonization, labelling and classification to give private wealth firms have any chance of extracting business benefits from technology innovation. Also, when one brings together the digital mindset with the right learning environment, the result is a steady progression in data exploiting from Business Intelligence/Management Information reporting to intelligent automation to machine learning predictions.