Wealth Management as a digital disruptor to legacy banking
The convergence of digital wealth management and banking technologies is disrupting legacy banking processes, leading to a broad scale shift to invisible banking.
In the very near future and, in some cases already today, business and consumers will be able to engage in normal banking and wealth management activities without even being consciously aware of it.
When banking is embedded in daily activities, it becomes invisible
This already occurs to some extent when people use tap-and-go to pay for items at stores. However, in the near future, invisible banking could completely revolutionise many of the experiences that are taken for granted right now. For example, one Australian bank has already introduced a ring that can be used to make tap-and-go payments, which is the next evolution from smart watches. Customers may also soon be able to use their voice to simply ask their preferred digital assistant for an update on their banking and investment portfolios.
Wealth managers are now using new technologies including artificial intelligence, analytics automation, personal financial management software, the Internet of Things (IoT), voice banking, banking as a service, and fintech innovation to achieve new levels of service and personalisation for their customers, based on data-led insights.
The shift toward invisible banking through personalisation means wealth managers have a greater responsibility to include customer lifestyle data into their digital platform to improve the delivery of wealth creation and investment advice. this increased personalisation also places additional importance on customer data and privacy protection.
Predictive analytics are allowing wealth managers to deliver advice based on data at a given point in time. This means that, for effective analysis, data must be immediate and relevant, otherwise it should be destroyed to avoid inaccurate insights. Relying on manual processes to manage data destruction is fraught with risk. If data isn’t destroyed when it should be, it can inform erroneous advice and expose financial advisers to professional indemnity risks.
The Role of Data in Invisible Banking
Managing data efficiently makes data more agile. Data that is agile can be easily brought together across data siloes, even during mergers and acquisitions. Data fabrics have now emerged as a much-needed architectural solution to transform and harmonise data from multiple sources on demand so that it provides wealth managers with everything they need to evolve to the next phase of wealth management, and the provision of invisible banking.
It’s important to note that customers will have a greater level of trust in their wealth management provider to allow their personal data to be used to deliver invisible banking services. This means wealth managers must be able to confidently stand by the quality and security of their data, and the data platform they use. Information privacy and data security both play an integral and crucial role in invisible banking and wealth management services. Wealth managers that can demonstrate transparency and ethical dealing through accurate, real-time data insights will be best placed to succeed.
Legacy banking is evolving to provide richer and more personalised experiences in the data-fuelled era. Wealth management firms are increasingly turning to cloud-based, secure data platforms that break down data silos and create more opportunities for seamless, invisible banking. These platforms give wealth managers peace of mind when it comes to ensuring the quality, accessibility, and reliability of data they use to deliver financial insights for their customers.
You can find out more about how InterSystems can help you find innovative solutions to your most critical data challenges here
This article was written by Michael Hom, Head of Financial Services Solutions at InterSystems. More of his posts can be viewed here
