Chapter 1: Digitizing Wealth Management: The Opportunity That Turns Into a Threat

The volume of assets that are managed by asset and wealth management firms globally has increased rapidly over the last few years. The industry’s forecasts predict that the strong growth will continue. However, while the advance of new technologies and innovation caused a paradigm shift in large parts of the financial services industry, the effects on asset and wealth management (AWM) have not been very strong.

The need for digitization of services has been negligible. Customer needs were a driving factor in the development of digital financial services, but not so for AWM. Compared to the core business to consumer (B2C) services of traditional banks and insurers, the total number of clients is much smaller. Furthermore, there are fewer interaction points: High net worth individuals as well as larger companies contract asset managers in order to take a passive position. This does not necessarily mean that customer experience is not important in the AWM segment, but it is not a deal breaker. There have not been extensive frontends or applications that millions of customers were using on a daily basis. For AWM clients, the performance was and still is crucial.