Investopedia defines Wealth Management as an investment advisory service that combines other financial services to address the needs of affluent clients.

Traditionally, the business of wealth management is based on personal relationships and trust as client engagement involves several individuals and manual processes. The clients deal with an investment advisor who is supported by the middle and back-office staff – the opening of accounts, transfer of money and transactions are all performed by various individuals and thus prone to human error. While it appears to be a smooth functioning place to an outside observer, in reality, it’s hardly ever the case.

The current business model has poor scalability and efficiency – according to McKinsey, the need of the hour is a next-generation operating model that is supported by Data, Analytics, and Technology. The pandemic has catalyzed this inevitable change since it caused a shift towards digital modes for sales and delivery of advisory services. The clients seem to have accepted the change too and expect the best of the changes to continue post-pandemic.

We are currently at a juncture when the industry’s business models are getting disrupted, with digitization accelerating the change. Here are a few of the several drivers bringing changes to the world of wealth management.

Data & Analytics

The wealth management industry seems to be behind the curve in terms of the adoption of Data & Analytics. However, leveraging D&A for different business processes such as client advisory, portfolio building &management, risk evaluation, etc. could significantly enhance the value delivered by wealth management firms.

Data analytics benefits advisors and clients alike – better analytics and visualization tools can add value to the vast amounts of data that advisors deal with. Leveraging advanced data analytics tools and techniques, wealth management organizations can generate meaningful and actionable insights for their clients to make informed investment and business decisions.

Cloud Adoption

Most wealth management firms struggle with the complexities and inconveniences of legacy software systems – cloud computing allows for modernization without changing the IT landscape completely in one go, as it can be implemented in a modular manner.

The pay-per-user function also transforms the way in which wealth management firms create and offer customized applications and services.

Future-forward firms have begun planning their cloud transformation strategies, as they are well aware of the challenges involved in implementing one, while simultaneously being convinced of the many positives it brings, including the ability to help Wealth Managers use their resources more efficiently, plan their budget management and allocation, and help the organization to obtain flexibility by building an enabling IT infrastructure.


Robo-advisors are defined as digital platforms that provide automated, algorithm-driven financial planning services with little to no human supervision – they collect information from clients about their financial situation and future goals through an online survey and then use the data to offer advice and automatically invest client assets – thus, they are also called Automated Wealth Managers.

They are an attractive option for young investors who don’t have a large sum to begin investing with, who don’t necessarily need the face-to-face human interaction and relationships that the older generations prize, and who would rather not spend a lot of money on wealth manager fees.


Complying with industry regulations is a high-risk area for wealth management firms since any failure on their part can result in financial losses in addition to costing them their reputation as well as punitive measures by Governments. Firms have begun to employ technology to perform functions such as due diligence, transaction monitoring, regulatory reporting, data management, and so on to reduce regulatory risks as well as costs.

RegTech, or Regulatory Technology, not only eases the burden of compliance for wealth management companies but utilizes AI, data mining algorithms based on machine learning, offers services on the cloud and integrates with existing systems in organizations through APIs to make it easier for firms to adopt new technologies.

In conclusion, digital transformation is already underway in the wealth management industry. However, the successful transformation and adoption would require the organization to adopt it with an open mind. Technology adoption may be risky, but those firms that can adapt and embrace the change would fare better in the long term.

Experion Technologies is a digital transformation expert with over 14 years of experience working with clients from the Financial Services industry. We have been instrumental in the digital transformation journeys of several firms, equipping them with the advantages of D&A, AI&ML, and Cloud Adoption to build a more future-proof business. For instance, Experion proposed a data analytics-powered investment advisory services platform as a solution to the challenges a leading wealth management firm in the US faced. Designed with an intuitive interface on Web, Desktop, Android, and iOS devices, the investment advisory services platform helped its users to manage different kinds of investment portfolios seamlessly. Read the whole success story here.

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