Wealth management is the continuous provision of banking and related services by a financial institution to clients, owners of large private capital based on building trusting long-term relationships with a highly qualified personal manager in order to preserve and increase capital.
The basic principles of wealth management:
- confidentiality, as much as possible from the point of view of the current legislation of the country;
- an individual approach (the presence of a personal manager who works in personal contact with the client and in a convenient time mode for the latter);
- high quality service, ensuring long-term business cooperation;
- a systematic and global approach to managing a client's personal capital;
- financial planning taking into account possible client requests;
- an option of access to the top management of the bank.
The main trend that the wealth management sector is currently focusing on is to further improve data analysis to better identify and quantify risk
New applications for data analytics range from commercial operations and corporate risk management to small-scale personal wealth management. Further advances in data analytics are reducing information asymmetries between small and large financial institutions and investors, while reaping the benefits of automated financial services solutions. Advanced analytics also apply advanced business and risk management approaches such as behavioral and predictive algorithms to analyze all transactions in real time
Automated investment advice (aka “robotic advisors”) poses a significant competitive threat to operators in the do-only and do-it-yourself investment services market, as well as traditional financial advisors.
Such robotic and automated consulting resources will put pressure on traditional consulting services and the cost of such services, and will transform the consulting process.
Many self-investing firms have responded by developing in-house and proprietary solutions, and consultants are likely to adapt to this situation by adopting customer-centric, high-tech hybrid models. A secondary side effect of automated customer analysis is lower customer acquisition, conversion, and funding rates.
Blockchain is a new technology that combines a number of mathematical, cryptographic and economic principles to allow an unlimited number of users to maintain a database without the need for any third party validation or reconciliation. Simply put, it is a secured distributed ledger.
In the same way that Enterprise Resource Planning (ERP) software has enabled functions and organizations within the same business to optimize business processes by sharing data and business logic across the enterprise, blockchain technology will enable entire industries to implement further optimization of business processes through the collective use of data by companies with different or competing economic objectives.
The global wealth management industry is currently facing serious challenges stemming from global digital innovation, on the one hand, and increased competition, including from non-banking institutions, on the other.
Among the key areas for further development are the following: 1) automated investment consulting, 2) improvement of data analytics for more effective identification and quantitative assessment of risks, 3) inclusion of digital currencies in the investment portfolio.
