In 2022 global wealth managers face significant challenges requiring the executive leadership teams to re-think their target operating models to achieve the strategic growth objectives of the business.

The critical areas of focus for all wealth managers are well known and include integrating ESG criteria into the investment process and monitoring investor mandates to meet individual SRI aspirations. Differentiation is also desirable for a wealth manager’s strategic growth roadmap. A recent survey by Citywire found that wealth managers are having to look for new investment options as traditional strong markets like China have the potential of turning into a ‘black swan’ event such as a conflict over Taiwan or the South China Sea, as such major investment into the country is a major risk especially with other recent global events and the political and social outcry. The increased appetite by investors for access to alternative investments or the real asset markets has seen significant inflows into Private Equity, Private Credit, Real-Estate, Infrastructure and Renewables.

Digital transformation is a continued area of investment depending on where they see themselves on the digital maturity curve. As a starting point, wealth managers require better data and insight for alpha generation to deliver better market intelligence for new product development. This can be challenging (especially in the illiquid markets) when managing multiple systems, data providers, legacy platforms and at times constrained by legal and contractual obligations. Data is also used to provide essential management information, monitoring and governance for compliance and risk. Client services teams need data to better understand client behaviour and associated trends to provide a more personalised service and an enhanced client experience.

However, there are significant costs associated with scaling any business. To mitigate these costs, asset managers must be able to deliver operational efficiencies across their value chains which include the front, middle, and back office. In real terms the way to reduce the cost base is to identify inefficiencies in BAU, through business process improvement and by the automation of workflows. It is equally important to consider the important role that is played by innovation and emerging technologies such as blockchain and cognitive technologies that use ML and NLP.

For further details contact
David Landi – Head of Asset Management
E: David.landi@pskinetic.com
www.linkedin.com/in/david-landi/