# How to optimise Digital Wealth Management
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2020-10-30
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: How Wealth Firms Can Thrive Amid COVID-19 Challenges
Meta Description: Learn how COVID-19 has reshaped investor behaviour, the rise of digital tools, virtual engagement, and the need for the wealth management industry to
URL: https://financedigest.com/how-to-optimise-digital-wealth-managementhtml

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_By **Priya Bajoria,** Senior Vice President, Financial Services, Publicis Sapient_

COVID-19 has had a devastating impact on hundreds of thousands of lives, even in the most economically advanced countries of the world. In the last six months of the pandemic, two major shifts are visible in investor behaviour. A typical investor is very concerned about their personal health, their job [security](https://www.financedigest.com/top-fintech-trends-for-2021-enabling-smart-and-secure-finance.html "Top Fintech Trends for 2021 Enabling Smart and Secure Finance") and their [financial](https://www.financedigest.com/financial-literacy-what-is-financial-literacy-and-why-is-it-important.html) wellness. Their risk profile and needs may also have [changed in recent times](https://www.financedigest.com/why-the-time-is-right-for-finance-to-embrace-digital-change.html "Why the time is right for finance to embrace digital change"). They are looking for more active handholding from their advisors, both in the near-term to help them [manage their financial obligations and in the medium/ long-term to protect their wealth](https://www.financedigest.com/pragma-investments.html "Pragma Investments on Wealth Management versus Private Banking"). The other big change seen in the last few months is that the typical individual investor has also become more digitally savvy and is more comfortable using [mobile apps](https://www.financedigest.com/the-growth-of-mobile-fintech-and-the-impact-for-mobile-app-marketers.html "The growth of mobile fintech and the impact for mobile app marketers") for accessing their personal finances as well as utilising automated solutions to get access to customer service, more than ever before.

The other important consideration for the [wealth management](https://www.financedigest.com/annual-survey-of-wealth-managers-2022.html "Annual Survey of Wealth Managers 2022") industry is that a large portion of their workforce including advisors and their operations team have been working remotely. The virtual engagement model is here to stay, for the foreseeable future, where more effort will be [required to build](https://www.financedigest.com/whats-required-of-accounting-to-build-a-better-tomorrow.html "What’s required of Accounting to build a better tomorrow") and maintain a trusted relationship between the advisor and client. Employees of [wealth](https://www.financedigest.com/hsbc-adds-over-300-to-china-headcount-after-citi-wealth-acquisition.html) [firms have to be equipped with new and improved tools for data](https://www.financedigest.com/how-finance-firms-can-unify-two-data-approaches-to-improve-both-compliance-and-security.html "How finance firms can unify two data approaches to improve both compliance and security"), analytics and operational workflows to be able to service their customers better while meeting strict compliance requirements of sharing information with clients.

The time is now ripe for the [wealth](https://www.financedigest.com/hsbc-adds-over-300-to-china-headcount-after-citi-wealth-acquisition.html) management industry to optimise the usage of [digital technologies](https://www.financedigest.com/how-banks-can-use-digital-technology-to-become-more-sustainable.html "How banks can use digital technology to become more sustainable") to improve the engagement with, and servicing of their customers. This will ultimately help with client retention, which is amongst the most valuable outcomes that firms can expect in these [challenging times](https://www.financedigest.com/renewing-democracy-is-defining-challenge-of-our-time-biden-tells-summit.html "Renewing democracy is ‘defining challenge of our time,’ Biden tells summit"). In order to remain competitive, especially in the context of digitally native fintechs or non-traditional competitors like the Big Tech, traditional wealth [firms will have to prioritise investments towards](https://www.financedigest.com/russian-rouble-firms-towards-60-vs-dollar-stocks-up.html "Russian rouble firms towards 60 vs dollar, stocks up") the following:

Understanding Clients Better – Utilising [non-traditional unstructured data in conjunction with traditional](https://www.financedigest.com/growing-exports-of-non-traditional-jamaican-crops-creating-sustained-opportunities-for-ackee-market-sale.html "Growing Exports Of Non-traditional Jamaican Crops Creating Sustained Opportunities For Ackee Market Sale") information about client assets, liabilities and risk profile will help provide a 360-degree view of clients. Some examples of these data elements include information around broader life goals, health care, real estate expenses, different kinds of insurance, [tax planning](https://www.financedigest.com/tom-l-r-griffiths.html "Thomas LR Griffiths’ top 10 strategies for US tax planning"), etc. Advanced data models will need to be built and sophisticated algorithms used to gather meaningful [insights](https://www.financedigest.com/marine-big-data-market-to-expand-at-cagr-of-21-5-during-forecast-period-tmr-insights.html "Marine Big Data Market to Expand at CAGR of 21.5% During Forecast Period – TMR Insights") using this data. This in turn will allow advisors to assess the overall [financial](https://www.financedigest.com/financial-literacy-what-is-financial-literacy-and-why-is-it-important.html) [health of their clients and provide holistic](https://www.financedigest.com/the-bone-and-joint-health-supplements-market-to-escalate-on-a-holistic-note.html "The Bone And Joint Health Supplements Market To Escalate On A Holistic Note") advice to them, cutting across silos.

**Focused Client Acquisition** – Instead of going after the traditional [sources of meeting new clients in a physical setting or generating new sales](https://www.financedigest.com/most-twitter-shareholders-vote-in-favor-of-sale-to-musk-sources.html "Most Twitter shareholders vote in favor of sale to Musk-sources") leads across a broad set of clients, firms have to get more efficient about client acquisition. By using [Artificial Intelligence](https://www.financedigest.com/types-of-artificial-intelligence.html "Artificial Intelligence") tools for personalisation, customised offerings can be created for clients, thereby leading to better rates of conversion while keeping outreach costs low. Digital solutions can also be leveraged to improve financial literacy and help individuals realise the value of saving, investing [early and managing risk](https://www.financedigest.com/early-detection-of-mismatched-trades-is-key-to-managing-risk-and-maximizing-profits-on-the-pl-desk.html "EARLY DETECTION OF MISMATCHED TRADES IS KEY TO MANAGING RISK AND MAXIMIZING PROFITS ON THE P&L DESK") with timely [financial](https://www.financedigest.com/financial-literacy-what-is-financial-literacy-and-why-is-it-important.html) advice, thereby increasing the target client base.

**Enhancing Operational Effectiveness** – Investing in modernising legacy technology and leveraging [cloud solutions](https://www.financedigest.com/the-future-of-fintech-and-open-source-cloud-solutions-in-the-united-kingdom.html "The future of fintech and open source cloud solutions in the United Kingdom") is essential to maintaining agility and staying competitive with digitally native firms. Standardised workflows like account opening and portfolio [reporting need to be fully automated](https://www.financedigest.com/impact-com-named-a-market-leader-in-research-in-actions-partner-management-automation-report-and-in-g2-winter-reports.html "impact.com Named a Market Leader in Research in Action’s Partner Management Automation Report and in G2 Winter Reports") and data sources integrated using APIs to reduce the time-to-market to make new offerings available to clients. At the same time, stronger controls are required to mitigate operational risk and reduce chances of fraud, especially when clients and advisors may both still be learning to access and [share data](https://www.financedigest.com/how-data-sharing-can-give-brands-confidence.html "How data sharing can give brands confidence") remotely.

Eventually, we will begin to see a convergence of the [digital and human worlds](https://www.financedigest.com/six-reasons-why-digital-world-classtm-finance-organizations-outperform-peers.html "Six Reasons Why Digital World ClassTM Finance Organizations Outperform Peers") in the context of wealth management. **Cognitive wealth management (CWM)** will emerge as the hybrid model of providing advice between the traditional [human touch](https://www.financedigest.com/building-a-relationship-led-bank-requires-a-more-human-touch.html "Building a relationship led bank requires a more human touch") model and the digital first model. This could be that happy ‘nirvana’ state, where investors have access to all the digital technologies and can still tap into human advice and judgement as needed. CWM will also lead to democratisation of wealth management, where trusted financial advice is easier to access, and an individual does not need a minimum threshold of [net worth](https://www.financedigest.com/air-separation-plant-market-projected-to-expand-at-a-cagr-of-5-to-attain-a-net-worth-of-us-7-9-bn-by-the-end-of-2028-fmi.html "Air Separation Plant Market projected to expand at a CAGR of 5% to attain a net worth of US$ 7.9 Bn by the end of 2028: FMI") to get access to that advice. [Customer Service](https://www.financedigest.com/how-customer-services-has-changed-during-covid.html "How Customer Services Has Changed During Covid") in CWM will also evolve from being triggered by specific events or periodic reviews based on pre-set frequencies to proactive in the micro moment. There would be no [limit to using data](https://www.financedigest.com/omicron-poses-very-high-risk-but-data-on-severity-limited.html "Omicron poses ‘very high’ risk but data on severity limited") (both structured and unstructured) to inform advice, cutting across traditional silos. Backed by holistic and complete data, the [risk and return calculations will also become more accurate and dynamic as opposed to being based on a historical view of limited data](https://www.financedigest.com/how-the-global-insurance-market-will-keep-pace-with-evolving-risks-through-data-analytics-and-technology.html "How the global insurance market will keep pace with evolving risks, through data, analytics and technology"). Ultimately, if [digital](https://www.financedigest.com/the-digital-finance-revolution-empowered-consumers-turn-digital-to-protect-financial-security.html "The digital finance revolution: empowered consumers turn digital to protect financial security") technologies can make financial advice more affordable and relevant for the masses, wouldn’t that be a win-win for all.


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