Blog > Navigating the digital frontier

The pace of change continues to accelerate in the investment management sectors. The industry is constantly evolving to cater to the demands of a new generation of clients who seek tailored, efficient, and technologically advanced services.

As someone responsible for the global strategy of SS&C Advent solutions, I have the privilege of engaging with clients and industry experts to gain insights into the challenges and opportunities in this rapidly changing landscape and how we as technology provider respond to the market needs.

Recently, I had the opportunity to join a panel of experts to discuss the current state of digital transformation, portfolio management challenges, and the integration of AI in the investment management industry. It was a great experience, and I’m excited to share some key takeaways with you!

Digital transformation and challenges

We kicked off our discussion by diving into the state of digitalisation in the wealth management industry and the numerous challenges that need to be addressed. It has become evident that digitalisation is not a mere layer of technology added onto existing processes. Instead, it calls for optimisation of the entire operational model.

A few years ago, many firms equated digitalisation primarily with distribution and client engagement. However, this perspective has evolved significantly. To truly transform, firms need to examine the customer journey and operational functions. It is essential for the industry to recognise that there is no one-size-fits-all approach to digital transformation. The initial step entails a thorough comprehension of the operating model and client engagement.

Portfolio management: Key issue is data management

One of the panellists emphasised that advisors spend a significant portion of their time on presentations and reporting tasks. AI has the potential to revolutionise this aspect, but it is dependent on a solid foundation of clean and reliable data. The challenge is not only in harnessing AI’s power but also in ensuring ethical AI usage and scalability.

Data governance is of paramount importance. Identifying responsible parties for data control and creating robust data ecosystems are significant focal points. Currently AI functions as the icing on the cake, augmenting efficiency across the board.

Starting with a robust data foundation is crucial. Having a lot of data is great, but without a way to derive meaningful insights, it remains unproductive. Moreover, clients still value human interaction.

That’s where behaviour technology comes into play. It helps in understanding what decision-makers want to see and facilitates the efficient sharing of information with clients. The next step involves the utilisation of AI and behavioural insights to enhance decision-making and communication with clients.

Custodial data

Managing custodial data has posed an ongoing challenge. Although it is not a new issue, it continues to remain a headache for many firms. Our approach has involved the automation of processes and investments in custodian integration. Through this we can bring in data and serve it quickly and accurately. To keep up with the increased demand intelligent automation is crucial, and it’s an area where the industry has made strides but will continue to evolve.

Core services and outsourcing

The wealth management industry has significant potential for outsourcing, but it comes with its own set of challenges. One of the key issues is that outsourcing providers need to offer standard services, and this is not always the case. However, there are firms that are working on standardisation, which is a step in the right direction.

Driving efficiency in operating models, whether you’re a software provider or a market participant, is essential due to the pressures on profit and costs. As a vendor, we see immense opportunities in the market, although there are different preferences geographically. Taking the emotion out of decisions is crucial.

Interestingly, some of the factors that hinder the ability to outsource, particularly for larger firms, are often the same factors that drive outsourcing for smaller firms As one of the other panellists mentioned, when you outsource a lot of work, you still own the risk in the end.

In conclusion, the wealth management industry is in a state of dynamic transformation. Our panel discussion provided valuable insights into the challenges and opportunities in this evolving landscape. From digitalisation to data management and AI integration, we’ve learned that a solid foundation, data normalisation, and standardised practices are the keys to navigating the complexities of legacy systems and the evolving priorities of the industry.

The future of wealth management is bright, and with the right strategies and technologies, we can meet the evolving needs of our clients while ensuring efficiency, ethical practices, and reliability in data management. It’s an exciting journey, and I can’t wait to see where it takes us next!

For more information, read the full report: Technology & Operations Trends in Wealth Management 2023.