Creating a frictionless business is one of the top five IT trends identified in our Technology Vision 2018 research report that will shape the financial industry and impact wealth management firms. But what does that really mean? In my last blog, I talked about building the future wealth platform—that in order for wealth management firms to provide personalized value to their clients, they need to supplement their truly differentiated internal capabilities with a strong network of specialized partners. So how do you declutter the proliferating wealthtech ecosystem and achieve a frictionless wealth platform?
The above-mentioned research revealed that 36 percent of businesses report working with double or more partners than they were two years ago. In wealth management, where firms depend on an increasing number of platform-, data- and service-provider partnerships, many still work with operating models ill-suited to leverage these partnerships effectively. Or, their own legacy systems were not built to support these types of partnerships.
Accenture’s recent Exponential IT research also shows that an overwhelming majority (83 percent) of C-suite executives want to maintain the best of legacy while moving to new technologies, and another 75 percent believe their organization’s existence will be threatened if they fail to update their technology.
So how can wealth management firms select the right technology partnerships and use them effectively?
Here are the five key factors to look for when navigating the wealthtech ecosystem:
1. Source of Innovations – Partners that can bring and accelerate outside-in innovation to your wealth management firm.
2. Distinct Differentiation – A partner that provides unique and differentiated capabilities aligned with your wealth strategy and offerings.
3. Leadership – Quality of leadership and your primary contact are critical to both driving innovation and creating an effective relationship that can tailor the partner to your firm.
4. Enterprise Ready – A firm that can demonstrate the scalability of the product to meet an enterprise firm’s needs, as well as the organizational maturity to navigate your organization sufficiently.
5. Ecosystem Amplifier – Partners that can be a beachhead for other partnerships to further accelerate your transformation. A good mature example is Salesforce, and the vendor ecosystem they’ve created around themselves that other digital wealth platforms integrate with (e.g. their app story).
Building the wealth platform of the future will depend on many significant and strong relationships and creating a powerful digital ecosystem.
If you are considering redefining your wealth management business with technology-based partnerships, please email me, Scott Reddel. I would be happy to help you think through your challenges, navigate the solution landscape, and share my thoughts on where the industry is going.
To learn more, download our full report, “Technology Vision 2018.”