Investment and the changing face of FINTECH: mobile apps and ROI in Wealth Management

The adaptation of modern wealth management companies to new technologies is only a matter of time. The main question by all CTOs, however, is whether investments in technology will see a return on the basis of economic indicators and the actual value.

There are many ways to approach the issue and it is important to know all the different aspects before making a decision. By analyzing the dynamics of technology evolution I will try to give the multifaceted dimension of balancing the relevant indicators before the final decision to install one or more applications.

Strategic view

Questions posed by a CEO usually start with how the use of wealth management apps will help to increase revenue and profits for all the stakeholders, without increasing risk in any department of the company. This skeptical attitude changes when presenting the positive aspects of the use of mobile wealth management apps, as CEOs realize that apart from branding, reporting, live access to portfolios, transactions and market indexes, there are other ways of using mobile applications with the use of data analytics being the most dominant. In practice this means that the Relationship Manager (RM) receives far more feedback than his customers. This possibility, however, allows the design and creation of better products and services throughout the whole wealth management sector. Therefore, although the objective is to integrate mobile apps, the change affects the overall strategy of upgrading services for current clients, and more importantly the way to attract new clients. By using data analytics you can squeeze inefficiencies out of the supply chain and help your clients to guide you to what is most important for them while still keeping your revenue, risk and cost at desired levels.

Technology view

Technology is now evolving faster than ever before with CIOs and CTOs being mainly concerned about the difficulty of adapting current infrastructures to the new mobile apps demands.. It should be highlighted that the companies which develop the apps, have identified this and have created new ways of implementations. In fact, they have decided to use more than one ways when it comes to implementing such a system. Apart from the traditional way that new software requires that a private banking department or a wealth management firm should have a compatible back office solution, mainly from the same vendor, now technology allows faster and lower cost operations. The new mobile apps which are appropriate for the wealth management firms have APIs that enable mobile access and links to ANY investment management platform. So from a technical point of view, they allow the CIOs and CTOs to decide faster than ever before, as otherwise they would need a lot of time and be faced with vastly harder decisions in order to implement these tools. Moreover, the risk factors which had been identified in the past and were due to the inability to secure the databases – as it should be in order to maintain the competitive advantage of the whole financial industry under the idea of ​​banking secrecy or other private information – are eliminated by the new technology. There are quite a few high security standards in mobile applications development, including geofencing, lock-on-shake, data not locally stored and double authorization, which can secure any external risk factor. Therefore the creation of a new direct communication channel with your clientele can boost productivity, without disrupting any of the current operations, while driving customer insights across all business functions.

Investment view

The decision to implement changes concerning technology implies recognition by decision makers based on all the positive economic indicators. As a result of the large number of scandals the financial community has experienced and the low level of client services available, there is now an emerging trend of offering new and valuable services that would lead to loyal clients for longer. Many wealth managers can view mobile applications as a necessary investment as the ROI could be seen in a pretty short time. The whole idea for the real value of a small or bigger investment has implications for RMs as it is better to spend their time using the data they collect from the clients’ actions, than prepare the data without creating trusted relationships. The use of mobile apps can create faster effective competitive advantages by optimizing profitability margins while creating long term savings. As it is often mentioned by experts in technological development, investments in new technologies can allow wealth managers to reduce costs, ease compliance matters as well as to attract and engage clients. They also allow for tailored services per client segment that can strengthen the clients’ loyalty while providing convenience and transparency.

Concluding there is always a lot of aspects and factors to consider prior to a new investment. However, if you follow the specific routes, you can always reach a mature decision with your current or future technology partners.