Did you know that Xerox PARC invented one of the first personal computers? That Kodak developed the world’s first digital camera? That Nokia was the global mobile phone leader from the 1990s till the early 2000s?
Each of those brands got left behind for various reasons, including the failure to embrace technological progress.
A revolutionary digital transformation for financial services is happening in Australia. Regulatory changes, a tech-savvy clientele, and the rise of financial technology (fintech) are driving financial services firms toward a future that is more client-centric, data-driven, and digitally enabled.
According to the 2024 EY Global Wealth Management Industry Report, building future-proof technology and data infrastructure are among the top challenges for wealth managers. How can they succeed? Here are five things to consider about future-proofing your financial planning business.
1. Enhanced Efficiency in an Automated Future
Repetitive manual tasks are getting more and more automated. Cloud-based software solutions can streamline workflows. These are freeing up time for financial planners to focus on client relationship management and financial planning consultations.
- Automated data entry and portfolio rebalancing, where a cloud-based portfolio management tool automatically syncs with client bank accounts and investment platforms, eliminating manual data entry.
- Cloud-based client onboarding and document management platforms that can streamline the process, where even agreements can be signed electronically, and follow-up emails can be automatically sent to ensure clients complete each step.
- Automated client reporting and performance tracking where personalised reports for each client can be generated with a few clicks, along with visualisations of portfolio performance, asset allocation breakdowns, and key financial metrics – with scheduled report delivery at pre-set intervals.
2. Improved Client Engagement and More Personalisation
Gone are the days of generic financial advice. There may be fears that wealth management would become more impersonal, but a shift in client expectations is happening toward the other direction. Clients are now increasingly open to sharing their financial data so that wealth advisors can more deeply understand their needs.
Meanwhile, technology is empowering financial planners to cater to this demand. For instance, cloud platforms can leverage data for deeper client insights, guiding personalised strategies. There are also emerging ideas about “robo advisors” and extreme personalisation through a state-of-the-art CRM.
Also, online portals today can enable secure document sharing and real-time communication, which can foster stronger client relationships. Financial planning tools and simulations can allow clients to visualise the impact of different financial decisions, making them more engaged and empowered.
3. Data-driven Decision Making and Smarter Risk Management
Data is the new oil in technology for financial services. Financial planners now have access to a wealth of data points, including client financial information, market trends, and economic forecasts.
By leveraging data aggregation and portfolio analysis tools, planners can gain deeper insights into their clients’ financial situations, identify potential risks, and make highly informed investment decisions. AI-powered client communication and risk assessment platforms further enhance this process by automating risk assessments and providing personalised recommendations based on client data.
Check out how we helped Swell Asset Management with their data management, creating cohesion between their systems and migrating their files from Google to Microsoft.
4. Fortifying Cyber Security and Data Privacy
Technology also presents new challenges. Cyber security threats and data privacy concerns are top priorities for financial planning firms. This is because data breaches can have devastating consequences, such as reduced client trust or significant financial losses.
However, these should not be a barrier to embracing technology. There are ways to counter cyber threats and data privacy risks, such as biometric authentication, encryption and decryption algorithms, AI-powered threat detection and mitigation.
Managed IT & Cyber Security solutions providers that specialise in the financial services industry can also help ensure you have the latest security measures in place to protect client data and comply with regulatory requirements.
5. The Super Synergy of Human Expertise and Technology
Despite the rise of technology, the human element remains crucial in financial planning. Clients still value the personalised guidance, empathy, and emotional intelligence from a skilled human financial planner.
Technology should be seen as a tool to augment and not replace human expertise. The ideal scenario is a seamless integration between human and technological capabilities. As they harness AI’s strengths, financial planners can provide a more comprehensive service to their clients.
AI excels at data analysis, scenario modelling, and automating routine tasks. Financial planners can focus on building trust and understanding client needs.
With AI, a wealth adviser can quickly assess a client’s risk tolerance and generate personalised investment options. They can then delve deeper into client goals and concerns and in-depth conversations with clients.
Embrace Your Digital Future
The financial planning industry is on the cusp of a significant change. By embracing technology for financial services and embarking on a digital transformation, financial planners can position themselves for a successful future and avoid oblivion.
Let’s get you started with a tailored technology roadmap to future-proof your business.