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Blog | Oct 3, 2023

Wealth Management Automation: The Covert Advantage

Wealth management automation
Table of Contents

The Intelligent Automation Impact on Wealth & Asset Management 

If it isn’t broken, don’t fix it… right?  

That seems to be the long-standing adage and guiding principle in the wealth and asset management industry. But times are changing. While established strategies may not be ‘broken’ themselves, they no longer align with investors’ evolving needs and expectations, let alone the realities of operating in the financial services digital-first era. These changes include the transfer of wealth to younger tech-savvy individuals, regulatory adjustments, clients who want more sustainable options and lower fees, and a tighter labor market where employees are choosing digitally focused organizations.  

Not only does intelligent automation (IA) stand as one of the most impactful levers to address these challenges, but it also opens the door to more opportunities with far-reaching benefits. In wealth management, it’s the underutilized strategy that propels you toward unrivaled success.  

Automation Might Be Obvious, But It’s Overlooked 

For the average wealth management firm, there are typically three main ways to achieve growth and bottom-line profit: 

  1. Hire more people. 
  2. Merge with or acquire another company.  
  3. Reduce costs by tightening employee costs or making people redundant. 

However, all these options risk being slow, expensive and potentially harmful to your reputation. But there’s a fourth, much less talked about way, which is proven to be quick to achieve results, very cost-effective, increase customer satisfaction and give you a significant return on investment (ROI):  

4. Leveraging IA to augment and work alongside your existing workforce.  

    The fourth point is where we want to focus your attention, as financial services automation is a strategy that’s been proven to work time and time again across any industry in which it’s been deployed.  

    What is intelligent automation in wealth management?  

    Intelligent automation is the combination of transformative, cognitive technologies to streamline and optimize business processes. It includes the use of artificial intelligence (AI), machine learning (ML), robotic process automation (RPA) and no-code development, just to name a few. Intelligent automation in wealth and asset management can be used throughout the firm to support functions such as client onboarding and asset transfers, compliance and risk monitoring, investment research and data analysis, as well as real-time investor reporting from multiple external platforms and communications. 

    What is robotic process automation in wealth management? 

    Robotic process automation (RPA) is simple and easy-to-use software that deploys digital workers to take over monotonous, repetitive and error-prone tasks usually carried out by a human worker. You teach these digital workers to perform tasks with step-by-step instructions so that your employees have more time to focus on valuable operations.  

    IA and RPA provide wealth managers with a new, easy and innovative way to handle investments, as it takes the repetitive, time-consuming and laborious tasks away from humans, who can then spend more time on engaging work.  

    Other benefits of wealth management automation

    • Faster, more secure and more accurate investor onboarding. 
    • Asset transfers. 
    • Cash management. 
    • Real-time communication with investors through any channel of their choice. 
    • Holistic, real-time valuations, even where an investor’s assets are spread across multiple platforms or where they hold assets that aren’t managed by the firm, e.g., cryptocurrency.  
    • Automation of data collection for investment research. 
    • Automation of compliance checks, both now, e.g., for the new Consumer Duty legislation in the U.K., and future regulation (remember compliance is just a process that a digital workforce can carry out for you). 
    • Removal of paper and spreadsheets from the organization through seamless digital data extraction and input into any internal system or external platform. 
    • Operational efficiency that leads to reduced errors and cost savings. 

    Will Wealth Management Be Automated?  

    All banks and large financial institutions already use IA in some shape or form and have done so for many years.  

    Within a wealth and asset management scenario, these readily available technologies can be used for: 

    Integrating front, middle and back-office processes

      There are a multitude of ways to get a rapid ROI. Most involve getting rid of manual processes between disparate systems and the automated checking and consolidation of data from any internal or external source.  

      Automating investor data migration and embedding the automation of data processing

      Digital workers are extremely good at it; they don’t make mistakes, never deviate from best practices and communicate seamlessly with other systems. A process that would normally take weeks and cost an enormous amount can be reduced to days or hours. 

      Automating AML, KYC, Consumer Duty, suitability checks, and client onboarding

         Digital workers handle these checks quickly while the targeted data for transfer is in flight between systems. Any discrepancies will automatically be sent to an employee to look at in more detail. Business management processes that previously took days to complete now take minutes or hours. 

        Digitalizing paper-based data

        The use of paper is still rife in wealth management and financial advice, yet optical character recognition (OCR) technology has been around for decades. Traditionally, larger organizations could scan, extract, classify and verify key information from paper and input it directly into any system of choice. Technology advances mean that it’s now readily available to everyone — wealth managers and financial advisors included. No more checking, no more re-keying and no more paper storage. 

          It’s critical to remember that automation doesn’t start and stop in the front office. To truly drive growth, IA should be a key component of every department and business function. Unnecessary manual tasks can be found in all areas, which can be low-hanging fruit for IA and cost reduction. For example, what processes must happen when an investor departs or a new employee is hired? A number of wealth tech companies will talk about their ability to ‘automate onboarding' but, because they can only manipulate data into/out of their own system, they can’t do it in the enterprise-wide way that firms need — and they can’t do it across the full client journey. 

          Importantly, IA with connections to specialist cloud and SaaS-based providers can be deployed and leveraged extremely quickly — typically within four to six weeks — for an even bigger competitive advantage.  

          Is Intelligent Automation Costly for Wealth Management Firms? 

          The short answer is no, because while this technology was previously the reserve of large financial institutions, the evolution of cloud technology and SaaS providers means that 90% of wealth and asset management firms can easily take advantage of it and see ROI quickly. 

          The cost of using automation technology is a fraction of the cost of hiring additional staff or tasking employees with doing this work. A digital workforce can automate numerous day-to-day activities, such as investor report consolidation, cash management, fee processing, etc., to drive efficiencies across the entire business and create a higher and faster ROI — with a happier workforce that can concentrate on tasks they enjoy and add value. 

          Intelligent automation is an essential facilitator of growth for wealth management IT leaders, COOs and CEOs. Learn more about how you can implement it in our guide for wealth and asset manager business leaders.  

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