EXECUTIVE SUMMARY

Our 12th global report shows that the wealth management industry is undergoing significant transformation as it adopts digital and new technologies to deliver efficiencies while increasingly providing personalised solutions and enhanced overall customer experience. At different stages on their digital roadmaps, firms and institutions continue to progress at pace, narrowing gaps across businesses, regions and investment decisions.

1. Digitalisation: Following the substantial investment and progress seen in the last two years, respondents gave their firms an average score of 5.3 out of 7. This is a marked increase from the 4.7 seen in 2023, making it the highest average score since 2021. Overall, this is in line with market anticipations of progress at pace. All respondents reported that their firms are showing good and acceptable progress against expectations (100% scores above 4) while 7 per cent felt able to give their firm a full rating of 7 for digitisation.

2. Regional Differences: The gap in digitalisation between regions also continues to close. This year, we extended the study to include Africa in addition to MENA and Latin America. The highest scores are still registered in North America, Europe, and the United Kingdom. MENA, Latin America and Africa show significant progress, albeit dependent on their infrastructure and regional challenges.

3. Automation: Likewise, the level of automation has risen consistently over the years, with firms and institutions reporting various stages of implementation, depending on their size and structure. Industry leaders set the pace, with both core services and outsourced non-core services integrated to streamline processes such as portfolio management, client onboarding, and reporting. On average, firms and institutions are reporting that 70 per cent are gaining momentum on maximising automation in portfolio construction and rebalancing, well ahead of the 65 per cent scored the previous year.

4. Data continues to underscore the effectiveness and success of the automation of processes and digitisation of the client journey. There are still challenges related to data, from data input points to timeliness and accessibility. However, most firms are progressing along that journey, with respondents giving an average score of 73.5 per cent for reliability, timeliness, and accessibility - an increase on the 65 per cent average score from last year. The best-rated firms scored 93 per cent, against the lowest score of 69.5 per cent, highlighting the gaps still existing for businesses.

5. Client Custodial Data is crucial for firms set to optimise service delivery and enhance client relationships. By leveraging this data effectively, firms can make better-informed investment decisions, monitor portfolio performance, and ensure accurate reporting for regulatory and tax compliance. With an average score of 5 and the lowest score of just under 5, the findings reflect this strategic importance. This continues the ongoing strong trend for a data-driven and client-centric approach that was so prevalent last year.

6. Risk for wealth management firms is increasingly complex and multifaceted, driven by a rapidly evolving landscape that includes integrations of legacy systems with advanced technology and applications; business resilience in the light of recent global IT outages, cybersecurity and DDOS; compliance and regulatory changes, market and geopolitical volatility, and shifting client expectations. Additionally, managing the everyday operational risks is critical to maintaining trust and safeguarding client assets. The expected score was high; in fact, the overall average score registered was 5.7 - the lowest score at 5.2 for asset managers, while the highest score was just under 7 for fund managers.

7. Outsourced Services are becoming increasingly common across businesses, as firms seek to enhance efficiency, reduce costs, and access the latest specialised expertise. While such services are attractive to fund managers (a score of 6.5), Multi-family Offices (5.4) and wealth managers (5), the scores were much lower for Single-family Offices (4.3), private banks (4) and registered investment advisors (3), who all scored lower than the overall average score of 4.7.

8. Tech Budget: These have not decreased in recent years. As the industry forges ahead at pace, with many having already invested, tech budgets reflect that drive, with only 13.7 per cent saying the budget will remain the same, and 2 per cent saying it will decrease. This score continues to reflect the ongoing importance of technology as an enabler and a driver for automation, efficiencies and innovation in future offers.

9. Environmental, Social and Governance (ESG): Regulations and disclosure requirements on ESG are here to stay, their impact affecting the operations of asset and wealth management firms and the companies behind the assets they manage. Progress was highly variable. With 17.7 per cent of respondents reporting that they have a leading ESG investment process in place, and 31.4 per cent reporting that ESG is fully embedded but the process could be improved, it is only 11.6 per cent that declared ESG is not part of their investment process and there aren’t plans for it to be included.

10. Advanced Technology Driving Transformation: Technology is transforming wealth management by enhancing client engagement, improving operational efficiency, strengthening risk management, and enabling data-driven decision-making. Firms that effectively integrate technology into their operations are better positioned to thrive in an increasingly digital and competitive landscape. On average, respondents agreed. With an average score of 4.1, where the highest score was a 7 and the lowest score a 1, responses demonstrate their firms’ appetite for the adoption of advanced new technologies in their operations.

11. Organisational Impact: Technology is also having a profound impact on career progression with an increasing demand for new skills. Respondents are very much aware that their careers and future roles may change in the coming years. With most scores registered at 5 (21.5 per cent) and above on a Likert Scale of 7, from across a global sample which included 55.8 per cent aged between 30-44 and 30.8 per cent between 45- 60 years of age, these are rising areas of concern which must not be ignored.

12. Age: The ageing demographic suggests that a sizeable group of skilled talent will be retiring in the next few years, triggering the need to attract a newer, more diverse and technically fluent younger cohort.

13. Balancing the Mix: Adopting the right mix of modern technology and digital innovation is becoming central to reinventing the client experience, enabling growth, reducing costs and effectively managing risks along the journey. The focus is on balancing the business and tech agenda while optimising operations, human interaction and value for the client base, albeit dependent on the business structure, size and location.

DIGITISATION – SHAPING THE NEXT PHASE OF EVOLUTION IN THE WEALTH MANAGEMENT INDUSTRY

The pace of progress in digitisation over the last few years suggests that the industry - which has progressed steadily, albeit at different intensities depending on budget and size – is now evolving into the next phase. Most firms and institutions have by now invested in core platforms and non-core essential technology. They have fundamentally transformed how solutions are processed, delivered and accessed. Their focus is shifting to the overall client experience.

As the WealthBriefing Tech and Ops Report, now in its 12th edition, continues to monitor the progress of digital adoption across technology and operations, we see signs of a significant transformation that has taken place, with increased use of digital tools and automated processes, changing client expectations, regulatory pressures, and increased competition. This is taking place against a backdrop of intensifying geopolitical and economic instability, with progress varying across regions, depending on the size and structure of the firms and institutions and the nature of their client bases.

Adopting the right mix of modern technology and digital innovation is becoming central to reinventing client experience, enabling growth, reducing costs and effectively managing risks. Indeed, as evident even from our discussions with industry leaders and experts for this study, the full impact of this next

EXHIBIT 1 phase will likely continue to unfold over the coming years as firms further integrate digital capabilities into their operations and client solutions.

This year, with an average score of 5.3 out of 7, against last year’s score of 4.7, the progress has reached a certain momentum of activity. This was following a slight slowing down immediately after the pandemic during which time the conversation was focussed on understanding the new technologies, revisiting strategies and looking for efficiencies in productivity. The emerging picture shows that the progress has continued at pace, even as it dealt with global volatility, planning activity and rising costs across the board.

Overall, just under 35 per cent of respondents felt able to give their firm the two top scores for digitisation, while every single respondent (scores above 4) reported that their firms are showing good and acceptable progress against expectations. This score was reflected across the businesses.

Regionally, this year we have added Africa and Asia Pacific, a key area driven by Singapore and Hong Kong. Across the regions we looked at, North America and Europe are still on their current trajectory, leading in their digital journey, with the United Kingdom and Asia Pacific close behind. Regions like Africa and

Level of digitisation achieved across the business during 2024

Latin America are still in the early stages while Asia-Pacific shows rapid growth, driven by digital strategies and fintech innovation.

What is clear is that this is a dynamic regional picture moulded by a mix of challenges and opportunities which are inherently shaped by regional differences in economic development, technological infrastructure, regulatory environments, and market maturity. Migration to the digital world is moving fast across the regions, driven by agility and investment in integrating digital systems. Market maturity is variable and can be viewed on a continuum that starts at digitisation of basic processes that address immediate needs for efficiency, client engagement, and regulatory compliance, such as CRM to more advanced digital initiatives such as digital onboarding, online account management and compliance automation.

Demand is high for mobile-first solutions by tech-savvy Millennial and Gen Z demographic cohorts, particularly in emerging regions where mobile device usage outstrips traditional banking infrastructure. Coupled with increased accessibility to technologically advanced outsourced solutions, this fully aligns with the global growing trends where clients are increasingly mobile and access financial services through mobile devices.

Widespread Adoption Of Digital Tools

As one of the respondents commented, “We have observed significant advancements in the integration of new technologies across various operational areas within our institution. The incorporation of AI has streamlined many of our processes, enhancing efficiency and data management.”

Such a response is reasonable when considering the speed with which new software applications and technology are being released and adopted in non-core services. Our findings indicate that the majority of firms and institutions are well ahead in their digitisation strategies, plans and projects, and are working at pace, within the parameters of the regulatory constraints, and in line with expected returns on efficiency and productivity, and client requirements and anticipations.

The challenge remains to keep pace with technology while staying compliant with regulatory requirements. Adopting the right blend of new technologies, infrastructure, systems, automation, and digital innovation is increasingly crucial for transforming client experiences, driving growth, cutting costs, and effectively managing risks.

2 Pace of digitisation achieved across the businesses 2021 - 2024

The Diverse Ecosystem Of Technological Solutions

Currently, we’re seeing a diverse ecosystem of technological solutions, with firms at various stages of digitalisation based on their size, culture, and target clientele. Many are in the market for comprehensive, all-in-one platforms, with the primary focus on boosting efficiency, ramping up productivity, and trimming costs.

We commonly see two key considerations to investment in technology - high cost and lack of IT expertise. Some just do not know what is available. With tech moving so fast, it’s tempting to wait for the “next big thing” before investing. However, this approach can backfire. Putting off tech upgrades might save money in the short term, but it can leave the firm vulnerable and behind the curve. New solutions can seriously boost efficiency and improve how firms run. It’s crucial to keep the tech stack current and weave new tools into operations.

It’s not always easy to pull the trigger on new tech. But in the long run, falling behind technologically can hurt more than the initial investment pains. It’s about finding that sweet spot between caution and innovation. Doing so requires a methodical approach: stepping back, clarifying goals, and carefully crafting processes that match the desired operational scale and quality. By dedicating time and resources to thorough planning at the start, firms can sidestep the pitfall of hasty decisions.

Notwithstanding the focus on core technology, there’s a sense that we’re on the cusp of something bigger. Artificial Intelligence (AI) is poised to be a game-changer, not just in enhancing back-office operations, but in fundamentally reshaping how wealth managers interact with their clients. The real opportunity lies in leveraging AI to forge deeper, more personalised client relationships.

Beyond traditional financial metrics, we’re talking about systems that can analyse a client’s behaviour and investment preferences to anticipate their future needs, tailoring services with uncanny precision. The value-add here is in understanding each client’s unique relationship with money and their individual goals, then using that insight to provide truly personalised investment advice and product recommendations.

This shift greatly enhances a wealth manager’s relationship management toolbox to a bespoke service model, powered by AI. With clients’ expectations changing, it is increasingly important to understand the individual behind the portfolio. This evolution could redefine what it means to provide value in wealth management, creating stronger, more enduring client relationships in the process.

The firms that can successfully bridge this gap – combining operational efficiency with deeply personalised service – will likely emerge as the leaders in this new era of wealth management.