By: Vishwanath Donti, Senior Director, Capital Markets, LTIMindtree

Convenience and seamless experiences are the key factors that the new generation of investors are seeking. Gen Alpha expects a highly intuitive, personalized and visually engaging platform for wealth management. This is the catalyst for wealth management firms to invest in digital tools that cater to smooth and seamless experiences empowering their clients to conduct their business with minimal assistance. Such tools will act as a differentiator and entice customers with significant value additions. Moreover, they will enhance business opportunities for wealth management firms and their clients.

Modern capabilities for a better digital experience

As wealth management firms digitally transform to offer a more enticing user experience, they will focus on:

Self-service tools

There is a growing need for wealth management firms to empower their customers with self-service tools. This is driving the rise of robo-advisory platforms and virtual chatbots to help clients manage their financial planning and portfolio selection. These tools will supplement human advisors, enabling them to focus on clients’ core needs, risk profiling, and growth opportunities while facilitating seamless digital transactions. They will also help wealth management firms reduce overhead costs, supporting a more profitable business model.

Panoramic 360-degree customer view

Wealth and asset management firms need to consolidate client data across their business and, when applicable, gain a holistic view of customer preferences and transaction patterns. Currently siloed, this data can be integrated using technologies like data aggregation, data lakes, or APIs for external market data. This will enable firms to customize offerings effectively based on an in-depth, data-driven understanding of their customers’ preferences.

Hyper-personalization

Hyper-personalization provides tailored recommendations based on a customer’s unique needs, goals, risk tolerance and preferences. This typically entails the use of AI and advanced data analytics to provide this degree of personalization. It enhances customer satisfaction and engagement.

Next-gen technology for enhanced digital experiences

Wealth management firms will utilize several next-gen technologies to optimize digital experiences such as:

Conversational AI: This will enhance customer interactions with natural language interactions and entice the new generation of investors.

Mobile-first approach: A mobile-friendly platform for wealth management with seamless experiences on smartphones and tablets as well as quick updates and transactions will win over Gen Alpha.

Gamification: Making investing fun with game-like features can be a powerful way to captivate the latest generation of investors. This can also help build financial literacy with engaging formats of teaching such as videos, infographics and quizzes.

Explainable AI: This is an important element to ensure that recommendations serve the customer’s best interest and are traceable.

Gen AI: Harnessing Gen AI will accelerate the transformation of legacy platforms so wealth management firms can adapt quickly using code conversion and reverse engineering.

Blockchain for secure data: Utilizing blockchain-based asset registry platforms provides secure and transparent recording and tracking of assets for high-net-worth individuals (HNIs) and ultra-high-net-worth individuals (UHNWIs).

Personal finance apps: A rise in personal finance apps and bots for clients and their advisors will provide quick updates leveraging data from several sources and channels. This will require AI, Gen AI and machine learning algorithms to automate processes while providing accurate and timely advice with tailored investment ideas that take customer input into consideration.

Modernization of core wealth platforms: This will entail wealth firms adopting a modern tech stack with real-time data processing, analytics and reporting that leads to improved recommendations and advice.

Benefits of an optimized digital experience in wealth management:

Leveraging innovative technology for delightful digital experiences will lead to:

• Enhanced client relationships
• Seamless experiences
• Personalized recommendations
• One-stop for insights

The road ahead

The future of wealth management looks exciting and firms that adapt to the new wave of digital transformation for delightful, seamless customer experiences will win over new clients, particularly Gen Alpha. Existing clients from previous generations will also enjoy the convenience of these modernized digital experiences for wealth management. The crucial question is how quickly wealth management firms can integrate such tools and capabilities into their operations. A new wave of hyper-personalized services and experiences powered by innovative technology will provide tailored investment strategies to clients based on their individual preferences and life goals. AI algorithms and analytics that analyze vast datasets will serve as a powerful foundation for accurate, relevant and timely recommendations.

Chatbots and virtual assistants will provide real-time financial guidance, fostering a more intuitive and accessible wealth management journey. The future landscape of wealth management will see AI as a tool and a personalized financial companion, shaping a new era of intelligent and empathetic wealth management.

Conclusion

In conclusion, forward-thinking wealth management firms that embrace digital solutions will be able to reduce costs and offer innovative profit models to attract and retain clients. Seamless experiences across all platforms and devices will allow firms to scale with ease and reach even more customers. Maximizing client satisfaction, while maintaining essential human-advisor interactions, will foster greater loyalty. Furthermore, the ability to quickly adapt to evolving client needs and technological advancements ensures a competitive edge and drives new avenues of business growth.

It is imperative for the C-suite of modern wealth management firms to prioritize adaptability in tandem with the accelerating pace of digital transformation and invest in tools for superior digital experiences to delight their customers and ensure sustainable success. Doing so will transform experiences from mere transactions to stronger customer touchpoints, driving customer retention and guiding customers to the next best action.

References:

• What is the great wealth transfer? Rodini, Laura, TheStreet, June 20, 2023
• Gartner Forecasts Worldwide Hyperautomation-Enabling Software Market to Reach Nearly $600 Billion by 2022, Gartner, April 28, 2021

Download the complete Asset and wealth Management 2024 report on: Future of Asset and Wealth Management in 2024 – LTIMindtree