Why wealth management firms must integrate a holistic approach in today’s digital era

 As the world treads towards digitalisation, wealth management firms must keep pace with changing technologies by preparing their operations for the digital age.

Today, technology is powering a completely new set of formidable wealth managers equipped with digital capabilities. Clients too expect a seamless experience that is convenient, insightful and conducive to smartphone-based functionality – more so after the Covid-19-induced lockdown.

Indeed, Covid-19 has precipitated a forced transition to new ways of working. As a result, it’s key to ensure a holistic journey is mapped out. With a better understanding of newage digital tools, wealth managers can enhance efficiency as well as future-proof their businesses.

As Kidbrooke CEO Fredrik Davéus put it, “Today’s technology can make this process much easier and more scalable by equipping HNWI-oriented wealth managers with tools that would allow them to make their customer meetings more pedagogical and intuitive. Moreover, it empowers financial advisors to focus on the core, exclusive value they can provide to their customers namely developing the human relationship.

“At the same time, the holistic capabilities of brand new digital analytical tools can finally provide high-quality financial decision support for those who historically have been excluded from high-quality wealth management services, the mass affluent customers.”

Furthermore, as the financial services industry leaps towards more connectivity and transparency by using technologies such as open banking, the priority for wealth managers has shifted to leveraging data analytics alongside developing a client-advisor relationship. Davéus added, the concept of open finance constitutes a macro trend in the financial industry. “The ability of wealth managers to tap into this trend will be instrumental to their success during the next phase because their business models are so closely connected with summarising the entire financial profile of the customer and advising in the most appropriate way how to proceed,” he said.

Helping wealth managers to become digitally empowered is where Kidbrooke comes in. Its simulation engine dubbed OutRank empowers firms to build financial journeys covering pension planning, investment advice and guidance, credit, mortgages, insurance and tax, as well as integrate all of these together for a holistic experience. For instance, customers will get advice on their pension planning while also considering their mortgage situation and overall financial health.

“Furthermore, to cater to wealth managers’ demands regarding compliance, the firm offers both regulated advice and guidance capabilities depending on the regulatory frameworks of the countries of our customers’ choice.” Daveus continued.

Tellingly, the sector has been dragging its feet in terms of onboarding online tools due to the common misconception that they would have to spend more time and money to so do. However, applying super-human predictive analytics could be done in days, according to Davéus. Digital transformation is a challenging task but some degree of cultural change might be necessary to facilitate continuous progress.

Giving instances of Kidbrooke’s projects, he detailed, “Our partners and customers such as Skandia, TietoEVRY and Evida took from just a few days to a few months to integrate Kidbrooke’s OutRank API and complement their offerings with next-generation digital wealth capabilities.”

Digital transformation is not reserved for players with unlimited resources. “Evida, a small financial advisor without a development team, built its entire platform from scratch in under seven months,” Davéus added. Highlighting the services Kidbrooke provided Evida, he continued, “They met us on the journey to build a scalable analytical tool for their team that could visualise the financial lives of their customers from today until they would be a hundred years old. While their competitors are stuck with confusing and unscalable excel sheets, Evida is pioneering digital wealth.”

Admittedly, to stay relevant in the future, wealth management firms need to address every aspect of a customers’ overall financial status. Looking ahead, wealth managers will continue to play a crucial role in making educated financial decisions, Davéus said. “Today they have the technology to destroy these siloes once and for all by offering their expertise and experience to those who need it in the most scalable, affordable and innovative way possible,” he concluded.

“In the end, it is all about cost-income ratio, and those who will be able to provide superior service at a low cost, will lead the industry in the future.”

Kidbrooke was recently named in this year’s WealthTech100. Read the full list here. 

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