Martin Greweldinger, co-CEO at Avaloq, discusses how innovative technology is helping financial institutions to meet the fast-changing needs of their wealth management clients, particularly in Asia.

What role does digitalization play in the ongoing transformation of the wealth management industry?

Wealth management is generally a service that is exclusively reserved for the wealthy, however for future growth, financial institutions must target other groups as well. Digitalization is helping to democratize wealth management by making it more affordable and easier accessible for a larger portion of the population.

Meanwhile, financial institutions are able to tap into new markets. This applies particularly to the lucrative Asia-Pacific region, in which there is currently huge potential in the emerging middle class.

How has the wealth management sector’s approach to technology evolved in recent years?

The importance of technology in wealth management is growing rapidly. Sales and client enablement are increasingly operating via digital channels. Covid-19 has been a catalyst for digitalization in wealth management and will accelerate this development even further. Also, artificial intelligence (AI) is being increasingly used in client relationship management as well as in investment advisory.

Our latest research amongst affluent and wealthier investors shows that, on average, around 60 percent of investors across Asia – namely, China, Singapore, Hong Kong, and Japan – are comfortable to have AI support them in their investment journey. However, there are numerous challenges involved as wealth managers require agile and intelligent platforms to orchestrate all these processes.

Can you expand on the specific challenges that wealth managers face?

Wealth managers should be able to concentrate on their core business, adding value for their customers. All other processes, such as the back office, should be automated as much as possible to maximize efficiency.

Wealth management will become a service that is integrated transparently into many process chains, but the greatest challenge to achieving that is the proper storage, management, verification and consistency of data.

There are still too many data silos, which wealth managers will have to abandon, especially in light of the ongoing digitalization. Nothing works without perfectly prepared data.

What trends do you see in digital client engagement?

When it comes to engagement, it is important for clients to be able to contact their advisers through their preferred digital channels and not through some separate new app. Clients want to communicate via platforms that they also use privately in their everyday lives and on which they feel comfortable.

In China, our research shows that over 50 percent of investors consider conversational banking to be one of the top three most exciting capabilities to have in their digital banking experience. Covid-19 has accelerated progress in this area, and ultimately it will lead to more homogeneity in the wealth management industry.

How is Avaloq helping financial institutions to digitally transform?

There are very few providers that can automate the entire process chain from end customer to adviser, all the way to core settlement. We do that and power digital transformation in the wealth management sector through fully integrated software.

We have recently launched three new platforms to allow financial institutions to meet the fast-changing needs of their clients: Avaloq Engage – an AI-based client engagement app, Avaloq Wealth – a platform that powers hyper-personalized investment advice and Avaloq Insight – a federated learning system for data preparation.

Such innovative solutions are designed to boost digitalization and pave the way for the democratization of wealth management.

Avaloq is a global leader in digital banking solutions, core banking software and wealth management technology. Based in Switzerland, the company has a strong international presence, including offices in Singapore, Hong Kong and Manila.