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Asset and Wealth Management

The growth of global private wealth picked up momentum in 2016, allowing for a good deal of regional variation. All regions experienced positive growth, with North America, Western Europe, Latin America, and the Middle East and Africa posting stronger expansion than in the previous year, and Asia-Pacific, Eastern Europe, and Japan growing at slower rates. Asia-Pacific was nonetheless the most robust region, achieving an increase that was just shy of double digits. We expect sizable growth to continue.

Although wealth managers need to raise their digital games, most have so far pursued digital innovation primarily as a feature selection exercise, centering on what their existing technology can provide along with what competitors and fintechs may intend to offer. Many of their digital launches have been realized opportunistically, stemming from one-off task forces, thus producing basic, largely disconnected, or insufficiently embedded digital capabilities.

In order to make a true step change and leapfrog the competition, wealth managers need to shift their approach to digital technology and design advanced, high-impact client journeys front to back—creating a next-generation, 2.0 version of the client experience. Such a client journey would:

  • Seamlessly cut across digital, relationship management, and expert channels
  • Focus on the moments that matter most to clients
  • Inject individual portfolio analysis, proposals, and instant interaction with relationship managers
  • Align all required delivery processes end to end

In Asset Management, a Call for Innovation

The global asset management industry faces growing challenges that were confirmed by its performance in 2016. For the first time since the 2007-2008 financial crisis, the revenue and profit pools of traditional managers fell worldwide. Moreover, margins contracted as pressure on managers’ fees continued to rise. Investment outflows from traditional active products persisted. Amid such a difficult environment, which steps should asset managers take to achieve a sustainable, positive trajectory?

There are five opportunities for asset managers to make significant gains while coping with their industry’s difficult and shifting environment:

  • Innovation and excellence in managing the overall business portfolio
  • Adoption of advanced data and decision-making technologies
  • Structural cost management
  • Gaining entry to the Chinese market and other pockets of fast growth
  • Strategic M&A to achieve a winning business model

Success in the future will require asset managers to identify opportunities, move boldly, and transform the very way they work. Firms that lack a sustainable source of advantage will struggle to survive.

Financial Institutions
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