Accelerating Digital Innovation
The BCG’s survey likewise revealed that 97% of respondents “were committed to making digital transformation a top priority,” though many still struggle with the implementation of said technology.
By enhancing their digital offering, the BCG said wealth managers can engage clients – who are increasingly used to receiving advice and products via a digital channel – more effectively. “Ultimately, the combination of better digital engagement and smart analytics has the potential to lift revenues significantly,” the firm asserted.
“Smart analytics allow for precise customer targeting through both descriptive and predictive analysis,” said the management consulting firm. “Wealth managers now have the opportunity to use behavioural, demographic and lifestyle data to think ahead of the client in determining the next logical investment.”
Not only that, but wealth managers stand to gain from long-term cost optimisation and operational effectiveness of a properly implemented digital framework.
However, the BCG warned it is important for wealth managers to realise that “digital technology is not just another silo next to their traditional business model but rather a change in their DNA, requiring systematic process redesign and integration with legacy elements.”
Again, the BCD stressed that the success of this digital initiative hinges upon wealth managers’ adaptability and willingness to let go of some of the old methods of operation.
“A comprehensive digital initiative cannot be based on incremental improvements, as has often been the case in the past. Focused prototypes must be quickly produced, tested and improved, and innovations should be managed as a portfolio, not unlike a venture capital fund.”
Wealth managers can even decide to partner with or strategically acquire financial technology firms to accelerate the process, the consulting group suggested.
