Academy of BFSI,

Crystal Gazing into Wealth Management 2020

The global wealth management industry is experiencing unprecedented growth with a projected annual growth rate of 4.7% through 2021. Global volume of net investable assets of HNWIs (high net worth individuals) will increase by around 25% to almost US$70 trillion by 2021. A booming and affluent working population across the world, growing base of HNWIs, increased entrepreneurial ventures backed by investment firms, and a rise in the value of investible assets have all contributed to the growth of the wealth management sector.

India is one of the top 10 countries in terms of total private wealth held, according to Capgemini’s World Wealth Report. The wealth management industry in the country is expected to grow at 10-15% over the next few years. Increasingly, the young and burgeoning Indian urban market has shown a bigger appetite for risk, a bullish market approach, and evolved attitude to savings. This has led to greater demand for sound financial advice on diversified investments and wealth management practices.

Seizing growth in a challenging landscape

As the industry continues to evolve, wealth management firms face a unique set of challenges as they prepare to capture and ride the growth wave. These challenges include:

# Diverse and shifting customer preferences

Market savvy millennials promise huge growth potential, eventually contributing to a significant share of investible assets globally. They are tech savvy, agile and seek solutions at the touch of a button on their mobile devices. They constantly scour the market for information on how their money can be managed better. They expect agility, high engagement and involvement from their wealth management advisors, and demand holistic management of their portfolio. While they are more open to change and new partnerships, they can be a tricky set of customers to manage, given their varied expectations.

# Regulatory restrictions in a connected world  

In an increasingly globalized and connected world, regulatory restrictions continue to pose huge challenges for global investment and wealth management firms. The global geo-political climate is more volatile than ever before, and this directly impacts trade investments. Successfully steering through government and compliance requirements, while managing a global portfolio, is an operational issue that eats away into both time and resource bandwidth for organizations in this sector. Wealth management firms are therefore under increasing pressure to proactively plan and build regulatory-ready organizational talent and practices that can scale easily in coming years.

# Dearth of qualified wealth management professionals

Wealth management is fast becoming one of the most sought-after professions in the financial services sector in India. A fast-growing, educated and tech savvy middle-class population and the emerging millennial millionaires are only adding to the demand for competent wealth professionals across the country. Most established investment firms are increasing headcounts in anticipation of more business and expansion plans across the country, even as global wealth management players actively eye the Indian market.

However, financially savvy, market-ready talent is scarce at the entry and mid-levels of the profession. What’s more, as reputed firms re-haul their operations to embrace technology and new age applications to stay ahead of the game, they are struggling to upskill their existing talent pool of mid-level and senior professionals in order to stay relevant in an ever-evolving landscape. Consider this: 68% of wealth management professionals surveyed say that learning about and keeping up with new technology is their biggest challenge. Furthermore, 69% are concerned about staying relevant to a younger generation of investors.

# Existential threat from new, tech-savvy market entrants

Technology-driven new entrants in the market offer a variety of low-cost services at the click of a button, targeted at the promising millennial market base. These new fintech firms are disrupting traditional wealth management practices by offering highly personalized services, online fund distribution, AI-enabled digital advice, dynamic portfolio management and micro-investing services based on real-time market data. Contrast this with the rigidity and hardbound portfolio approach of traditional, long-established wealth management firms.

These changing dynamics are raising the bar in terms of how wealth management firms evolve and grow their business by investing in emerging technologies to deliver superior customer experiences.  41% of all wealth management professionals surveyed in a Thomson Reuters and Forbes Insights study believe that advanced analytics and cognitive abilities will have the greatest impact on the wealth management industry over the next few years.

Three technologies shaping the future of wealth management

Here are three big technologies that are disrupting the wealth management industry.

# Artificial Intelligence (AI)

AI has greatly impacted the financial services sector, including wealth management practices, by enabling highly differentiated capabilities across the investment value chain. AI technology and algorithms enable real-time analysis and understanding of enormous volumes of market data from across geographies. This has positively influenced wealth management advisory services by helping wealth managers offer faster customer services, real-time transaction opportunities, and more informed decision making.

AI and machine learning (ML) and robotics have also impacted the digitization of customer services across the wealth management value chain. AI has already delivered improvements in cybersecurity, risk management, forecasting, portfolio management and client profiling and relationship management. Wealth Management firms are also successfully using AI to profile customers and offer investment strategies best suited to their risk appetite and financial goals, providing the average investor with a white-glove treatment hitherto impossible. Morgan Stanley, for instance, uses ML algorithms with predictive analytics to enable its geographically diverse financial advisors to generate better insights and provide customized client solutions.

# Cloud, big data and advanced analytics

Migrating to the cloud is fast becoming the norm for wealth management firms as they deal with growing volumes of data. Firms are using the cloud for increased operational scalability and reduced fixed costs and tech investments. Cloud also enables on-demand storage and processing capabilities that aids speedy data processing in a fraction of milliseconds. With big data and advanced analytics, wealth management firms can process hitherto impossible volumes of raw and structured data from across various sources, including reports, structured data, news, social media and search algorithms.

New applications such as investor and market sentiment analysis are now increasingly popular, thanks to NLP and advanced analytics, making traditional wealth management practices obsolete. Smaller firms can now service a large customer base, thanks to these technologies, while large firms can effectively curtail costs and improve bottom lines when servicing an increasingly demanding customer base. From customer service and operations to data analysis and audit, cloud, big data and advanced analytics are changing the wealth management game. Wealth management firms such as St James’s Place have adopted cloud technology for increased speed, agility and core management of operations across their offices.

# Blockchain

Blockchain eliminates the need for stock transaction intermediaries and facilitates real time transactions in the global financial market, positively impacting transaction costs and capital availability while ensuring security and performance. Client on-boarding, data privacy, protection, know your customer (KYC) data propositions – all become more cost effective and easier to manage with block chain. BNP Paribas completed end-to-end fund transaction processes using blockchain technology last year, indicating the platform’s growing maturity. Digital investment portfolios that include crypto currencies are also poised to aid diversification of assets and help create a truly global portfolio like never before for the serious investor.

The benefits of embracing emerging technology in wealth management are clear: enhanced customer service, customized offerings and solutions, smoother operations, greater collaboration, global connectivity, and a future-ready approach. But what does this mean for wealth management firms in terms of preparing their workforce for the new reality?

Vision for the future: Reskilling and upskilling for 2020

By 2020, estimated total assets of US$1 trillion will be supported by investment automation technology, including robo-advisors, enhancing and supporting services provided by human advisors.  A good example is Wealthfront. The company uses robo-advisors to gather client inputs and relevant background information such as investor demographics, objectives, risk-appetite etc., to determine suitable investment strategies for the lower strata of investors with less complex planning requirements.

While technological advancements are a given, it is unlikely that technology alone will be able to drive superior outcomes for wealth management firms. Even as AI, ML and related technologies revolutionize business models and operations, wealth management professionals will play a critical role in delivering the human touch by interpreting the data and results in a manner that best meets customer requirements.

Firms that train their employees in wealth management analytics, AI, big data and more, will be best-positioned to optimize the ROI on their technological investments for long term success. Consider the case of UBS. While they implement technology solutions that enable clients to trade on any stock exchange in the world, they are also investing in re/up-skilling their financial advisors with regular training in sales, relationship management, and new product and technology skills. In sum, while technology will play a key role in simplifying the world of wealth management; wealth management advisors will need to be upskilled and re-trained to effectively embrace new technology and deliver superior customer experience.



  1. Business Standard, Accessed May 2019,
  2. com, Accessed May 2019,
  3. Wealth Management Outlook – 2018, EY, Accessed May 2019,$file/ey-wealth-management-outlook-2018.pdf
  4. Wealth Management Trends 2018, Capgemini, Accessed May 2019,
  5. Investment Management Outlook – 2019, Deloitte, Accessed May 2019
  6. com, Accessed May 2019,
  1. Investmentweek, Accessed May 2019,
  2. Economic Times, Accessed May 2019,
  3. Asset and Wealth Management,, Accessed May 2019,
  4. American, Accessed May 2019, news/ai-is-augmenting-morgan-stanleys-advisers-not-replacing-them.
  5. Computer World, Accessed May 2019,
  6. com, Accessed May 2019,


0no comment


The author didnt add any Information to his profile yet

Leave a Reply