Technology has already had a big impact on a range of industries, from introducing and developing the e-commerce sector to revolutionizing financial trading. Now, for the future of wealth management, it seems like technology developments will play a massive part of where the sector goes. There have already been some advancements that have helped wealth management companies improve their services, but these factors look set to develop the industry even further.
The technology that powers many cryptocurrencies, such has been the popularity and success of the likes of bitcoin that many banks have begun looking into using blockchain themselves. Operational inefficiencies pose a big challenge to the mutual funds market and it is believed that blockchain could help address this obstacle. As customer demands increase so does the need to replicate and reconcile records which can form unnecessary overheads. However, blockchain is still only in its early stages so there is still plenty of time needed before it can be adopted across the wider wealth management sector.
Big data has been another buzz word banded around in the past few years and this could have an impact on wealth management. Companies have the ability to source all sorts of information about their clients which can be analyzed to help generate the best service for them. Over social media sites and other methods, this information can be used to create personalized advice and strategies, from the start of an investment flight plan onwards.
One issue with technology improving is that so do cyber-attacks. Obviously, when there are large sums of money involved, this is far from ideal. Fresh strategies need to be employed to minimize the risks of an attack and for some wealth management firms, it can be advisable to outsource this to technology experts. Especially for start-ups and SMEs, as research has found that 43 percent of all cyber-attacks are aimed at small businesses with fewer than 250 employees.
Artificial Intelligence and Machine Learning
In many ways, artificial intelligence and machine learning can be used to automate the extraction of big data for a range of wealth management purposes. Still, in the early stages, companies need to develop ways to efficiently use these to differentiate themselves from competitors. The likes of client onboarding, creating digital passports and more are just a few examples of how this could be used.
The future of wealth management looks like it will rely a lot on where technology goes in the coming few years.