The wealth management industry is far behind the power curve when it comes to the adoption of digital technology, according to a recent report by PwC.
More than two-thirds of high-net-worth individuals (HNWIs) use online and mobile banking. More than 40% review their portfolios or investment markets online, and more than one in three use online services for portfolio management, according to PwC. Meanwhile, just a quarter of wealth managers offer any digital channels beyond email.
And clients are noticing. Asked to rate what they valued most about their current wealth manager or advisor, technical capabilities fell near the bottom of the list, eighth out of 11 options. And only 39% said they were likely to recommend their current wealth manager. That number fell to 23% among clients worth US $10 million or more.
“Wealth management is one of the least tech-literate sectors of the financial services industry, and is falling well behind non-financial services industries,” PwC stated in a release. “HNWIs enthusiastically adopt technology and over half of them surveyed believe it is important for their financial advisor or wealth manager to have a strong digital offering. CEOs of wealth managers recognize the need to adopt digital but relationship managers resist the adoption of technology.”
And many in the wealth management sector are oblivious to their technological shortcomings, PwC found. Some even rated their firms as “digitally sophisticated”, when in fact “the only service offered to clients is a website.”
“As technology transforms the financial services sector in Canada with the presence of FinTech, wealth management needs a stronger digital presence to provide a greater value for technology-savvy HNWIs," says Raj Kothari, managing partner, Greater Toronto, for PwC Canada. “The findings in the global report ring true for the wealth management industry in Canada as we see a younger and more diverse pool of HNWIs in the Canadian market. Building a digital infrastructure informed by them, in order to meet their evolving needs, is required to ensure sustainable growth for wealth management in Canada.
“If firms do not get ahead of the current and future demands of the market they simply will not survive in the medium to long term,” Kothari added. “Firms that embrace and seize the digital opportunity now are in a powerful position to deliver real value which combine the very best in technology enablement and human capital.”
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