Wealth management firms are in for a “bumpy ride” when building data analytics and AI capabilities in house, according to Giuseppe De Santis, product manager at Avaloq.
Research by Avaloq found half of wealth management professionals believed their systems were outdated.
Avaloq’s De Santis said trends he was seeing within the wealth management space were firms wanting to become autonomous with their data and create their own analytics to get personalised insights from it, rather than relying on third parties.
While also wanting AI application available across their whole organisation to all employees.
“Implementing data analytics and AI, is not an easy journey. It is a bumpy ride for wealth managers to build those capabilities in house,” he explained.
53%
of wealth managers using 4-9 systems to complete daily tasks
The challenges for wealth managers was creating and maintaining a data ecosystem and the accessibility of that data.
De Santis said firms were either building in house or using a “multi-vendor” approach.
“To build in house, you need to have, first of all, the right skill set in house. Then those people need to stop doing other things, and for two years only work on this data platform. That’s the risk that you need to take.
“With the multi vendor approach you have the challenge of having too many systems and not having synergies [between the systems],” he explained.
De Santis said AI will increase the data literacy of wealth managers, meaning they will be able to recognise the value of data and the competitive advantage it brings.
“There are three areas where [wealth managers] are going to be more impacted by AI.
“These are identifying new opportunities, facilitating risk management, and the regulatory aspect,” he added.
Swivel-chairing
According to the research, respondents cited having to “swivel chair” between different systems to complete tasks.
Some 33 per cent of respondents use 10 or more systems for their work, while 53 per cent use 4-9 systems.
Suman Rao, managing director for the UK and Ireland at Avaloq, said when she was speaking to prospective clients, she often saw firms have multiple systems, all doing the same thing being held together by “a very flimsy plaster”.
There is an incredible demand for having updated workplaces that allow the relationship manager to navigate seamlessly between the other systems
“There is an incredible demand for having updated workplaces that allow the relationship manager to navigate seamlessly between the other systems,” she explained.
Rao described the wealth management community in the UK as being a laggard with 44 per cent of respondents saying their current technology systems were outdated.
She said this was evident when Avaloq was undertaking transformation programmes within a business and the first six months were spent simplifying its technical landscape.
In terms of what wealth managers were looking for, 84 per cent wanted automatic summary creation of client meetings, while 79 per cent wanted automated compliance reporting.
“Regulatory pressure and the importance of not getting it wrong is just top of mind for all CIO and CEOs.
“Through our SaaS offering we want the front office organisation to focus on their clients, have a minimum number of systems that they have to deal with, with a consolidated and modernised user interface to be able to actually run through their daily tasks in a more efficient way,” Rao added.
alina.khan@ft.com
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