According to a report by Accenture, the three key strategic themes that will shape the wealth management industry in the coming years are:
- Greater industry consolidation
- Greater adoption of new technologies
- Talent challenges
– Advisor challenges and skill crunch
How then, can Software-as-a-Service and other FinTech firms best support wealth management firms as they aim to tackle these ongoing challenges?
With the rise of unpredictable, non-traditional players entering the wealth management space through the advance of technology, such as neobanks and the like, the competitive environment is getting tougher. Incumbent players are quickly attempting to adjust their businesses to suit the changing industry, resulting in a greater degree of partnerships and joint-ventures with SaaS and FinTech players. Between 2021 to early 2022, new records were set in Europe for merger and acquisition, with many incumbent and traditional players seeking to expand their offerings through innovative FinTech solutions. This new trend will inevitably lead to incumbents seeking digital transformation and looking to adopt new technologies to better manage the new, increasingly competitive wealth management landscape.
SaaS and other digital transformers can capitalize on the need for incumbents to revolutionize their digital offerings by tailor products to target specific niches or segments. This includes offering the potential for incumbents to access new client markets across up-and-coming wealth management segments, such as mass and upper affluent clients. They can also offer ways for incumbents to tackle big investing trends, such as sustainable investing and personalized portfolios in an effective and efficient manner.
New, innovative technology is already transforming the wealth management space today. The introduction of technologies such as artificial intelligence, machine learning and virtual and augmented reality have already been seen throughout the industry, and are changing what both clients and advisors expect from the wealth management experience. As the industry continues to grow and mature in the technological aspects, SaaS and FinTech players need to constantly innovate and lead the way into a digital future.
The current skills shortage for advisors has been a looming problem, with the ongoing shortfall of in-house advisors sparking concerns for the industry. Here, FinTech and SaaS players can help to increase the attractiveness of the industry by offering products that can help ease the burden on advisors, whether it be by a robust portfolio construction tool or comprehensive risk profiling solutions. Solutions that can help the advisor to focus on what is important to them and the company, instead of being burdened by repetitive and menial tasks, can make a new generation of advisors more interested in working for established firms.
In the coming years, SaaS and FinTech firms have much more to offer wealth management than simple technological solutions. They have the potential to become an integral part of the wealth management industry and have a say in the innovation and transformation that the landscape will undoubtedly experience.
Rutul Gandhi, Chief Revenue Officer, APAC
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