Digital aspirations within wealth management are being impaired by an analogue approach to technology

Almost half of financial services professionals readily experience challenges when searching systems for documents or information, reveals M-Files

New research from M-Files has revealed that almost half of financial services professionals (47 per cent) regularly experience challenges when searching systems for documents or information. For sub-sectors within financial services, such as wealth management, poor information handling is likely to have severe ramifications for any digital aspirations.

The findings are part of a study conducted by Vanson Bourne, on behalf of M-Files, to understand the key challenges impacting global office workers in financial services when handling and managing information in the workplace. Commenting on these findings, Tim Waterton, VP of UK Business for M-Files, says:

“Historically, wealth management has thrived on brand heritage, placing a high importance on the need to maintain solid relationships between the client and wealth manager.

“Looking specifically at how wealth managers traditionally manage information, the approach is typical of wider financial services; that being it’s incredibly paper intensive, they use shared network drives and folders to store information. Email is primarily used for communication and sharing documents. This was reinforced not only through our study but also amongst industry practitioners spoken with at recent events. From those conversations we know evolving demands, the need for greater regulatory transparency as well as non-traditional competitors entering the market, is forcing change, particularly pushing firms to digitally transform.

Last year, a report from EY into the digital disruption within the wealth management sector revealed most high-net-worth-individuals (HNWI) would gladly swap having a wealth relationship manager for better digital capabilities.

Waterton states barriers to digital change amongst wealth managers are exposed within the M-Files research. Amongst the challenges facing staff when searching systems for documents or information, documents being labelled incorrectly (35 per cent) and information being stored in the wrong folder (37 per cent), were key reasons for lost information. The result meant 83 per cent of participants are forced to recreate lost assets.

This inability to track, access and manage data in an efficient manner, while frustrating for staff, is also likely to be poorly received amongst NextGen investors, as Waterton explains: “A huge catalyst for change in the wealth management industry is coming directly from the client. Personal service has traditionally been a driver for loyalty amongst HNWI’s, but as wealthy millennials begin coming to the fore priorities are shifting.

“As digital natives, NextGen clients demand instant access to information. They are less focused on the value of the relationship and typically require little handholding. Instead, they are prioritising access to real-time data and personalised solutions, all brought together under a seamless digital experience. This puts the spotlight on the need to streamline process, whether in the early stages of on-boarding a new client or whether making it easier and faster for staff to access information when the client demands it. Failure to have these systems and processes in place, will not only impact employee’s ability to do their jobs competently, but will frustrate the digital desires of HNWI’s, potentially driving them into the arms of more progressive competitors.”

Waterton concluded: “There is no doubt that the wealth management sector is facing unprecedented disruption. If firms do not incorporate technology-led innovation into their strategic thinking they risk becoming increasingly outdated, losing their presence in the market. Inherently, poor document management practices will only exacerbate future challenges not only amongst staff but the clients they serve too. By implementing an intelligent information management solution, data can be managed, secured and shared intuitively. Information can be quickly and easily accessed, providing NextGen clients with much needed visibility over the ‘health of their wealth.’