Our new report on Wealth Management outlines the key signals of change for the sector, possible future winning business models, and the capabilities to help compete and thrive in future.

Winning future model

A winning operating model for future wealth management requires eight connected capabilities. Players should digitize the middle and back office to deliver an enhanced customer and service experience. Embracing data-driven strategies and a platform mindset help compete with new digital competitors.

Wealth managers investing in these are twice as likely to see overall success:

Connected

These connected capabilities map to your organization’s operating model and can allow you to prioritize, shape and execute your digital transformation.

Signals of change in wealth management sector

Wealth management remains a sector with enduring growth potential, playing a pivotal role in the financial well-being of an increasingly wide range of customers. The main players now have an opportunity to ‘own’ financial advice and become a central part of customers’ lives, offering digitally enhanced, personalized service. However, traditionally strong revenues and profitability are under threat from growing competition, including established financial institutions and new entrants.

Growing competition in wealth management comes from non-traditional players and neo banks operating exclusively online, and fintech firms and tech giants entering the market. In addition, profit margins are suffering as COVID-19 creates challenges together with the recession, weakened consumer confidence, unemployment, rising debt and low growth.

Technology continues to revolutionize traditional customer relationships, while regulators are intervening to enhance competition, help improve cybersecurity, protect data, and ensure enterprise resilience. As a result, successful wealth managers invest in digital operating models and data-driven insights, adopting a platform mindset while retaining the close personal relationships that characterize the sector.

In the Finnish Asset Management environment, we have seen strategic consolidation development. The future will show how the current geopolitic position will affect the economy and investments in Finland. ESG is at the core of strategy for many asset management players, but it will be interesting to see who will come out of the competition as a winner.

Eeva Rakkolainen

Get in touch