The global wealth management sector is ramping up its investment in technology to tackle a range of challenges, according to research by Ortec Finance, a provider of risk and return management solutions for professional investors.
According to the research, 74% of wealth managers plan to increase their technology investment to meet growing regulatory demands, with 35% expecting a substantial rise in spending over the next three years. According to the findings, the industry is focusing on leveraging technology to streamline compliance processes and address evolving regulations.
The study, which surveyed wealth managers, portfolio managers, financial advisors, and planners across the UK, Canada, Italy, the Netherlands, Germany, and Switzerland, highlighted a shift toward tech-driven solutions.
94% of respondents agreed that substantial investments in technology are necessary to better understand and monitor ESG factors, as well as climate risks impacting client portfolios. As ESG concerns become increasingly important to investors, wealth managers are prioritising tech solutions to enhance their portfolio management capabilities and provide clients with clearer insights into sustainable investments.
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84% of wealth managers said they anticipate boosting technology investment in tools that can accurately track the future performance of key asset classes. This shift reflects a growing need for more sophisticated predictive models to guide investment strategies.
The research also revealed that nearly half the respondents believe technology is improving operational efficiency, while 29% noted that it is helping them deliver more client-centric services. Wealth managers are increasingly relying on technology not only to navigate regulatory and ESG challenges but also to enhance overall client service and engagement.
Tessa Kuijl, MD, global wealth solutions at Ortec Finance, said: “Digital transformation in wealth management firms has accelerated in recent years, driven by the rise of the tech savvy clients who expect more personalised advice and innovative tools that enhance their investment journey towards achieving financial goals.
To increase productivity and maintain client satisfaction, firms are implementing new IT systems to provide advanced tools to advisors and operational staff. This comes with challenges in effectively integrating the different pieces of the puzzle, all while keeping costs in check and sustaining business growth momentum.”
