PwC: Wealth, Asset Management Industry Not Investing Enough in Digital
March 7, 2017
PricewaterhouseCoopers (PwC) recently released results from its latest Global CEO Survey for the wealth and asset management industry, which has been tracking CEO sentiment across key business and consumer trends for the last 20 years.
In the report’s introduction, Barry Benjamin, partner and global asset and wealth management leader at PwC, noted:
“This industry is not thinking as agilely around technology and disruption as it should. How do customers interact with these firms and how will they want to in the future? When we think of demographic changes with huge wealth transfer where people do not work the same way as their parents – do we even have the right model to address their needs?”
In its assessment of responses from 185 CEOs across 45 countries, PwC found that 92 percent of these CEOs feel confident about future revenue growth.
However, only 10 percent stated that they’re planning on strengthening their digital capabilities. In contrast, 32 percent of banking CEOs and 28 percent of insurance CEOs want to build this area.
Additionally just 27 percent of CEOs are looking to collaborate with fintech entrepreneurs or startups on building new products or business models, while 31 percent of CEOs from banking and 37 percent from insurance plan to do so. This “confirms the picture of a sector reluctant to innovate,” according to the report.
The survey also found that 48 percent of the sector’s CEOs say they have strong digital skills, and 37 percent say that they’re active on social media. This suggests they are still playing catch-up to what is now considered tablestakes: According to data from the Pew Research Center, nearly nine in 10 U.S. adults use the Internet, 77 percent have smartphones and nearly 70 percent are on social media.
Overall, this new report illustrates a drastic difference between the desire for technological innovation and what advisors on the ground are actually asking for.
“There’s a clear disconnect internally at asset and wealth management firms,” comments Meagan Hency, vice president of marketing at Hearsay. “The PwC survey findings highlight how minimally focused CEOs are on their teams’ digital capabilities. In today’s digitally connected world, clients expect their advisors to be available anytime, anywhere – from ‘one-to-many’ channels like social media and mobile-friendly advisor websites, to personalized ‘one-to-one’ communications like email and text messaging.
“As generational wealth transfers become more of a focus for advisors, with an expected transfer of $30 trillion assets from baby boomers to Gen X and millennials, it’s never been more critical for advisors to leverage the efficiencies and data insights that digital provides.
“If firms do not invest in providing the field with the digital tools they need to stay relevant, they’re ultimately hurting their advisors’ ability to successfully service clients and, ultimately, their bottom line.”
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