The power of data in wealth management
31 MAY, 2021
By Constanza Ramos
Digital tools are becoming more used and more valued, but clients expect them to lead to less personal wealth relationships. Clients’ willingness to share more personal data will allow firms with the right capabilities to enhance digital engagement and for this reason wealth firms should prioritize improvements to hybrid models and the development of flexible, seamless interactions.
A report by EY says that Clients are far more open to sharing their data than wealth firms realize, especially among younger generations.
In fact, more clients are willing to share personal data with their primary wealth manager than with their doctor, provided they receive more relevant services and experiences in return.
That places wealth managers in a far stronger position of trust than banks, insurers, retailers, technology firms and media platforms.
How willing are users to share their personal data with wealth managers in order to get a more personalised service compared with other organisations?
| Generation | Percentage of clients willing to share their data with their primary wealth manager | Percentage of clients willing to share their data with their doctor |
| Millenial | 78% | 74% |
| Gen X | 69% | 67% |
| Boomer | 68% | 68% |
Many wealth clients are clearly ready to go on a data-driven journey with providers. But how far and how fast can this go?
It’s notable that, in addition to the 72% of clients willing to share their financial goals and ambitions, more than half are also happy to divulge their personal aims and objectives — information that’s key to delivering tailored services and engagement.
However, wealth firms could do more to extract value from the data they already have. Providers can harness the wave of data being released in the form of documents, downloads, logins, messages and meeting requests. A clear data and analytics strategy will help firms to gather and label this fast-growing data set, clean and structure it in a single “golden source” and interrogate and analyze it.
Leading providers can then use AI and machine learning to optimize the applicability and value of their client data. Firms seeking inspiration could look to their counterparts in technology and online retail, industries that thrive on customer data and are innovating at a staggering pace. The use of neuroeconomics can also help to develop richer client insights.
In the long term, clients will only be willing to share their data if they believe the process is creating value. That depends on more than just applying data insights in a relevant way.
