Wealth Ops: The precipice of change

by | Jul 14, 2023

Written by Carl Woodward, co-founder & Director of Simplify Consulting

Digitisation, offshoring, a pandemic, a recovery and now Consumer Duty. A sequence of events and initiatives that have transformed wealth management operations across technology, proposition and people.

Yet there’s more change ahead. 

We appear to be on the precipice of even greater transformational change for three primary reasons: 

1. A new technology landscape, embracing data and artificial intelligence to drive efficiency, tailored journeys and better customer outcomes 

2. A truly global ‘anyshore’ resourcing proposition, which will leverage skills, experiences and diversity across geographies 

3. A customer demographic, shifting expectations and demands beyond those ever seen before. 

This moment in time brings a real focus to the future of customer-facing and back-office functions across wealth businesses. It comes as they prepare to meet the expectations of the FCA’s Consumer Duty regime – and while they continue to digitally transform the experience their customers receive. 

Traditional Wealth businesses have previously had to manage the legacies of the past as they look to transform their business to provide a range of omni channel experiences. We’re slowly seeing the mainframe green screens being switched off, self service portals being switched on and customer interactions embracing a number of new solutions, from chatbots to now mainstream social media communication channels like WhatsApp. 

With that evolution now firmly underway, the stranglehold of legacy technology is less of a barrier to change. The real test is now whether the anticipated adaptability, scalability and flexibility of platforms and operating models can meet the challenges that these new opportunities present. 

We continue to see the struggles inherent in the world of in-specie transfers and how the industry has grappled with the adoption of technology to drive more efficiently delivered customer outcomes; so how will it react to the increasing demand for instant access, instant responses and instant solutions? 

Collaboration will be key, the regulator will be instrumental and cultural change will be inevitable. Teamwork will need to be less insular than ever before with vertical and horizontal integration being crucial to successful outcomes being achieved. 

There are also two elephants in the room: cost and sustainability, and they are not mutually exclusive. 

Downward pressures on profit margins mean there is a real focus on driving out cost from the bottom line – and operations is rarely immune to those cost challenges. Efficiency has always been an aspiration in eliminating waste especially in those commoditised processes where there is limited scope for strategic advantage. Yet as the operations landscape changes, the value of both front and back office operations and the ability to use them as service differentiator becomes that much greater. 

In respect of sustainability, the ESG-focused world we now operate in means it is necessary to keep a keen eye on developing solutions and delivering them in an environmentally efficient way. With the shift towards online and the consequences of the pandemic, we must be careful that we don’t replace commuter journeys with data centre cooling fans, that ultimately offset any environmental benefits that may have been realised. 

What might we see in the future as businesses pivot to react to the changing landscape? Will digital capabilities and the transition to a ‘one and done’ operating model drive the consolidation of front, middle and back-office functions? Will the rapidly developing capabilities of AI bring a more personalised approach to servicing and meeting customer needs in the mass market; a proposition that has historically only been achievable in the ultra-high net worth bracket? Will the ability to work anywhere provide access to skills and experiences and a more diverse and inclusive workforce that has never been achievable locally in the past? 

And what about the evolving needs of the customer; workplace pensions now bring a much younger demographic into the world of wealth; how does the market interact and engage with that group in a way that resonates with the way they behave and communicate? The concept of the great wealth transfer will continue to see a new, emerging group of customers with wealth, looking to invest for their future. 

These are just some of the questions that we’ll be looking to answer in the coming months with our Wealth Operations oriented whitepaper, our detailed in-depth customer research and via our Wealth Conference, at Glaziers Hall in London on 12th October. 

We’ll be shining the light on the future of Wealth ops, bringing in expertise from across the industry to challenge current thinking and discuss the initiatives already underway. Registration is open now and early bird tickets are available until the end of July – register now and be part of the conversation.

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