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The speed of digital disruption is so rapid, wealth management firms will need to empower clients by reinventing processes and inventing new ones, but not without developing a clear strategy first.
New digital technologies are enabling unimaginable development and unprecedented disruption right across wealth management. Today’s client expects more informed, more personalized, more transparent and more collaborative service more quickly, efficiently and effectively than ever before.
The message for wealth management firms is clear: Become a disruptor. Incumbents will need to take steps quickly to empower their clients by leveraging digital technologies, but not so fast that they go at it without a clear strategy. Firms that will be poised to succeed in the digital revolution will be the ones that focus on delivering better customer outcomes.
In this report, we explore how wealth management firms can respond successfully to digital disruption. Hint: It involves much more than launching a new app.
Clients today expect a new kind of wealth management experience. They want more information, personalization, transparency and collaboration—and they want it quickly, efficiently and effectively.
The experience of other industries that have risen swiftly and resolutely to the digital challenge shows that digital capabilities create net new business value. Wealth management incumbents have been relatively slow to recognize the implications of the digital revolution. Challenged by legacy technology platforms, even the boldest incumbents are at best fast followers.
Digitally-empowered clients—or Generation D—are a cross-generational cohort who are better educated than those without digital capabilities. They’re also more demanding.
Generation D clients believe that their financial future is largely in their own hands, and they use technology to seek out engaging, education experiences. Moreover, our Generation D research found them to be less trusting and often more risk averse than those without such capabilities.
Responding to the digital imperative is no longer an option for incumbents—it’s a necessity.
The digital revolution is shaping an entirely new idea of what’s possible in wealth management. It enables new opportunities for firms to drive better client outcomes, engage prospective clients and build new value.
Based on our research and experience, we’ve identified three essential components of a potentially successful response to the digital challenge:
Empowerment: of both client and advisor, building trust by making clients better informed.
Engagement: to enable a more collaborative relationship between client and advisor.
Agility: of both mindset and business model, to adjust rapidly to the speed of change. An agile mindset will be critical to becoming a disruptor and responding with imagination.
June 25, 2014
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