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Grasping Asia’s golden wealth management opportunity

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This is a sponsored article from SS&C Advent.

Wealth management across Asia is booming. Growth opportunities bound in the region. For example, China’s wealth management industry is the fastest growing in the world1. Morgan Stanley research estimates surging household wealth could boost inflows into its wealth management market by more than US$16 trillion (100 trillion renminbi), at a time when high-net-worth and mass-affluent investors are hungry for comprehensive financial advice2.

Yet many wealth managers will struggle to take advantage of this opportunity. Competition is fierce. And with brand loyalty on the wane, firms can no longer rely on customer stickiness to retain business. Success will depend instead on delivering consistently strong performance, backed by best-in-class client services.

To provide that winning proposition, smart technology investment and deployment will be ever more crucial.

The technology onus
Wealth managers recognise this. The latest SS&C Advent Wealth Management Technology & Operations Trends report found 74% of firms have increased their technology investments beyond expectations, with 61% planning to up their tech budgets through to 20243. Client-facing/servicing functions are key areas of focus.

So far so sensible. The front office is where wealth managers gain much of their competitive edge. It also offers huge efficiency improvement potential. Better technology use can help firms grow and disrupt, and focuses staff costs on portfolio management, introducing new business lines and products, client capture and servicing.

Only three-quarters of the surveyed firms said they have achieved their near-term front-office automation ambitions though. Poor data and/or inefficient data access remain commonplace, while the industry still has a long way to go to reach full digitalisation and frictionless business processing.

Forward-thinking firms are therefore directing their technology investments towards seamless data access, bringing agile innovation to client servicing, and creating frictionless operations in business-critical areas such as onboarding. Automating portfolio construction and model management tasks will help optimise portfolio managers’ productivity and further boost profitability.

Post-trade work in progress
Reaching the desired levels of middle- and back-office automation have even further to go – although less legacy system baggage means respondents in Asia-Pacific are ahead of their North American and European peers.

Wealth managers have already made substantial investments in their post-trade operations to reduce manual processes, increase productivity and manage complexity. The shift to automated, exceptions-based processing – with the functional stability, scalability and predictability it brings – enable firms to grow at less cost and with lower risk. Continuing these operational efficiency efforts will remain vital as firms strive to stay competitive. And emerging trends across the Asia-Pacific region will only make the technology focus more important.

Ahead of the curve
One is a growing demand for best-in-class solutions that encompass the value chain.

As wealth managers get bigger and more complex, the burden on their IT infrastructures grows exponentially. Pre- and post-trade needs continue to evolve, requiring flexible platforms with the ability to adapt. Many “front-to-back” systems lack this sophistication. All their capabilities move in tandem, limiting the front office’s capacity to meet clients’ shifting servicing demands.

Best-in-class technology can also help firms capitalise on the second trend: continued demand for international investments. Diversification offers risk-adjusted performance and wealth preservation benefits. But investing in new geographic markets and asset classes brings profound internal, client servicing and compliance stresses to organisations that lack the right infrastructure.

A native multi-asset class and multicurrency technology platform gives wealth managers the flexibility to add new investment types as required. It enables operations teams to process transactions quickly and accurately, and provide ongoing investment support without resorting to manual intervention and workarounds. An automated infrastructure also helps operations teams provide timely, precise data to the front office for management information, business intelligence and client engagement activities.

Unlocking the value of data is a huge priority. As businesses become more sophisticated, and asset types, market reach and client requirements more diverse, demand for high-quality data and the ability to combine, manipulate and process ever-changing datasets will only grow. The importance of an integrated infrastructure that provides systems across the enterprise with seamless access to accurate and timely data cannot be overstated – and will be a major factor in determining tomorrow’s industry winners.

You may download the SS&C Advent Wealth Management Technology & Operations Trend report here.

1 Private Wealth Management in China – Statistics & Facts, Statista, 27 September 2021
2 Four Megatrends Fueling China’s $16 Trillion Wealth Management Opportunity, Morgan Stanley, 27 October 2021
3 Tech & Ops Trends in Wealth Management 2021, WealthBriefing/SS&C Advent, 28 June 2021

This is a sponsored article from SS&C Advent.

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