Discussed in an exclusive C-level roundtable recently hosted by Objectway and Compeer, UK wealth management firms highlighted their priorities for the digital agenda in the next normal.

Wealth managers firmly believe that digital transformation is critical in enabling them to achieve their high priority business objectives, namely achieving growth at scale. They also recognise that their current technology state is inefficient and cannot facilitate their objectives. This is supported by the most recent industry benchmarking data, which shows that a startling 7 in 10 firms were not able to exhibit year on year scale.

How will firms change over the next 12 months?

Firms have an ambitious roadmap for change in order to meet their objectives.

One of the first priorities is updating or changing legacy systems seen as a key inhibitor to operational efficiency. The main challenges and fears around doing this include gaining buy in from the board to fund a significant expense, and also demonstrating a compelling business case with clear measurable milestones.

Another main challenge identified was how to choose the best solution and more importantly the right partner in their digital transformation journey. Firms that have chosen a new system or are in advanced stages of replacing the existing ones, spoke about the importance of a trusted partnership approach, and forming a long-lasting relationship with their chosen partners. They also stressed keeping up the momentum within the business during change, by demonstrating ‘wins’ and evidencing ‘what’s in it for you’ to their staff to ensure a greater chance of successful implementation and take up.

Apart from the technological renewal, other immediate projects include ‘enhanced digitalisation’ particularly adding value across the front office to take advantage of more automation and spend less time on administrative tasks (which often take up 50% of time), and therefore spend more time on client-facing activities.

Improved digital tools and portfolio management functionality will also assist the investment management process to match client preferences with personalised portfolios that can be rebalanced in real time. According to senior leaders, “Clients are becoming far more demanding of a good digital offering, especially as a result of the last 12 months” and “digital change is required to attract new clients as well as develop existing ones” (such as increasing their share of wallet).

Hyper-personalisation: the nirvana for client experience?

The vast majority of intended projects are centred around enhancing a hyper-personalised client experience and include improving client suitability as firms try to create a more personalised client journey, better client communications through investor portals, and more efficient onboarding. Many of these touchpoints have been identified as providing ‘wow moments’ for clients, leaving a lasting positive impression of the firm.

The importance of utilising data to create customised experiences is summarised well by one of the COOs: “The role of data is massive, if you haven’t got the data right it can lead to a horrible and impersonalised experience”. However, there is still a lot of room for improvement in this area, as only 25% of firms were able to use data analytics in a meaningful way to personalise client experiences.

One of the consequences of digital change would ideally be a vast improvement in the state and standardisation of data. It seems the next 12 months will see significant work done on improving hyper-personalisation, although Nirvana may still be far away….