The wealth management industry witnessed major changes in industry structure and business models over the past decade. Technology, industry convergence, and the shift toward hyper-personalized digital solutions ensured significant shifts in the competitive landscape leading into the 2020s.
To put it mildly, the emergence of COVID-19 created an even more intense layer of complexity and change that will have a lasting effect on the industry.
In late 2020, Capco surveyed 100 professionals in wealth management to explore the current state of the market, the competitive landscape, and how the pandemic is affecting priorities and business model decisions.
Their verdict: The top three long-term effects on business operations are the expanded use of digital communication and engagement, accelerated investments into digitization, and added pressure on performance ratios. But their responses also signal belief that changes on wealth managers from here on in will be far greater than just making investments in new technology and learning to communicate effectively with clients over Zoom.
The industry is being disrupted, and firms are at a make-or-break moment to either get stronger in the next three to five years or be swept aside by new competitors.