The recent June 2011 PWC research paper entitled “Anticipating a new age in wealth management, Global Private Banking and Wealth Management Survey” highlights an interesting global shift in activity in terms of moving away from legacy IT systems.
Survey respondents are “addressing operational inefficiencies caused by having legacy platforms and, for global players, the issue of having different technology platforms across multiple geographic locations”. The survey suggests that the catalyst making wealth managers invest in technology now is a combination of changing client demands, new regulations and a legacy of underinvestment. It also asserts that wealth managers are looking to new technology to achieve priorities including:
1. Supporting and enabling business growth
2. Becoming a more client focused organisation, and
3. Cost reduction through enhanced efficiency.
After the general slowdown in IT spending during the global financial crisis (GFC), which has been discussed in numerous research findings, it is refreshing to see in the PWC report that wealth management organisations are beefing up their technology budgets again. Budgets have risen in the past two years for 60% of survey respondents.
While it was no secret that spending money on IT would translate to cost savings in the long run, during the GFC, organisations were understandably reluctant to fork out the necessary budget. Now that profit margins are generally expanding again, businesses are putting IT plans into action. The survey confirms: “…5% of wealth managers’ report that they have already implemented new solutions, which are now stable. Some 22% indicate that they have adaptable efficient technology platforms and processes, and are beginning to make significant productivity gains.”
I am pleased to see that organisations are now recognising that higher levels of automation can reduce costs and that rationalisation of technology systems will further reduce costs and achieve greater leverage.
After a period of holding on tight to the purse strings, it is great that organisations are implementing new IT initiatives in order to achieve cost and operational efficiencies and ultimately improve the client experience.
Do you see evidence of this in your organisation?