Today’s technology and data platforms open a new world of possibilities for the Advice and Wealth Management industry. Those who get a handle on data and successfully unlock insights that drive value right across the business will leapfrog the competition and future-proof for success in 2030 and beyond.

When it comes to data maturity though, wealth managers are lagging behind other industries, both within financial services and beyond. So far this has not presented a major problem, largely because most industry players are in the same position. However, the status quo cannot persist for much longer. Customers are becoming ever more accustomed to personalised services and digital channels from the other companies they transact with. They’ll soon demand the same from their wealth managers.

Three challenges that are slowing down progress

Wealth managers have been talking about the need to increase data maturity for years. So, why haven’t these conversations turned into action? Based on what we’re hearing in the industry, we’ve identified three main challenges that wealth managers face:

• Strategy
  Data must be central to the business strategy. This requires a cultural shift, as well as the right tools and technologies. Wealth managers feel there are few blueprints for getting this right. And they’re nervous, because data initiatives are expensive, potentially risky and take time to deliver returns. It’s hard to justify a two- or three-year transformation programme when people are concentrating on annual budget cycles and short-term ROI (return on investment).

• Customer experience focus
  Companies that do undertake data transformation initiatives tend to focus too much on the data itself, and not enough on extracting value for customers. This means they can end up trying to boil the ocean, instead of going for quick wins and iterative value roadmaps. Also, there’s a tendency to focus on data that’s already digitised, rather than talking to relationship managers, who have acquired years’ worth of insights into their clients’ needs and desires.

• Core capabilities required for success
  Companies want data-driven insights. But it’s not easy if they have poor-quality data, unclear processes and disparate, legacy source systems. Organisations need to invest in building the right core capabilities to lay a solid data foundation. Cutting corners early on can limit future value (and store up problems for later).

So, what is the way forward? How can the industry tackle these challenges to truly become data-driven and future-proof for success in 2030 and beyond? Part 2 of this blog series discusses how can companies overcome these hurdles and build data maturity.