Putting the future of wealth management under the microscope

Article published in Finanz und Wirtschaft, April 28, 2018
By Annika Falkengren, Managing Partner, Lombard Odier Group

Whether we like it or not technology is changing our personal and professional lives fundamentally and irrevocably. The wealth management industry is no exception. Rapid technological developments have, and will continue to change how we work, communicate and interact with our clients. The old certainties are being demolished, and it is becoming increasingly clear that the ability to marry the best of traditional, bespoke approaches with sustainable investments and state-of-the–art technology will be crucial. In short, we have to rethink the world of wealth management.

Social media has revolutionized and personalized communication, and it offers valuable lessons for those willing to learn. By connecting with clients on a more personal level, we will be able to meet their needs and preferences far more effectively. If we don't, we risk losing them. Today, we often segment clients based on their age, profession, geography and net worth. But to go deeper and really understand a client's interests and motivations would enable us to serve them far better.

The big data approach has already proven itself to be very effective. But it also carries with it some distinct risks concerning the ways in which this knowledge is used. That's why, amid all this talk of rapid change, it is important to emphasize that client confidentiality and an organization's integrity and reliability have an important role to play in this brave new world.

Those who have been reluctant to adapt to the new paradigm might feel vindicated following the recent scandals surrounding big data and social media. However, it is dangerous to think we can turn the clock back. The digital revolution is not a passing phase. As with anything new, there are teething troubles, but it is clear that client demand for state-of-the-art technology and safe and secure ways of interacting will only grow.

The giant tech companies and others are circling the financial industry. They see business opportunities, and they see the transformational potential of what they know best – big data. To stay ahead we must use what we have, a deep understanding of our clients’ needs, our unrivalled investment expertise, and technology that enhances our offering. Technology is a key pillar of Lombard Odier’s business model, and over a third of our employees are technology specialists who search constantly for ways to enhance the digital user experience and investment execution excellence. Quality speaks for itself, and that is illustrated by the fact that our leading banking technology is used and valued highly by other financial institutions.