Three things to consider when undertaking a digital transformation journey in wealth management

COVID-19 has forced unprecedented uncertainty and challenges on all industries and wealth management firms are no exception. Wealth technology leaders now more than ever need to be resilient, agile, and future-focused. Given current market, economic, and social conditions, this is a time of transformational, not incremental, change.

Wealth businesses are looking to innovate at a rapid pace and break into the world of digital services whilst trying to overcome the disruptive challenges forced upon them by COVID-19. Some wealth management firms have led the way. Since launching in Asia Pacific in 2015, Credit Suisse’s Digital Private Banking App has won multiple awards for client experience and servicing capabilities in offering digitally empowered advice1. Such firms are delivering new and innovative products. At the same time technology innovation is causing businesses to re-think their business models and how they can capitalize on new opportunities.

Wealth technology leaders need to become the source of innovation through digital leadership and act as a trusted advisor to the business. They need to consciously remove silos to foster enhanced collaboration, innovation and alignment across the organization.

A Deloitte study2 found that while certain front office tasks in the client life cycle have a high potential for digitization, most executives still believe that their core business of advising wealthy and sophisticated clients with complex financial needs remains at heart a 'people business. Nonetheless, all of them have clear plans for digitization (see Figure below) and are looking continually for ways to digital-enable their client advisors

Figure 1. Digitization priorities along the client life cycle

Three things to consider when undertaking a digital transformation journey:

Building the Digital to support High Touch vs Self-Serve:

In the digital age, where both in-person and remote customer engagement is expected, relationships are in real-time, choice is infinite, access and delivery is on demand, change is constant, the pace is accelerating, and technology enables everything we do. For Wealth technology leaders, who are looking to innovate by digitizing their services, simply adding a digital layer over existing business processes and IT systems is not good enough. There is a need to bring integrated skills in innovation, human-centered design, digital technology, risk, and overall leadership, all done in strategic, creative and adaptive ways3. Wealth technology leaders need to be able to drive a digital transformation that cultivates trust by offering the highest levels of customer service. The ability to listen intently and with empathy, and find ways to add a human touch to each conversation, even in digital communication will be needed4.

At the same time this does not mean that each and every customer interaction needs to be a high touch (in person) service. Wealth businesses should look at their customer segments, their overall customer value chain and then determine points that need to be kept high-touch vs. points that can be made more self-serve. As an example, while customer acquisition and advice will require elements of high touch in person services, in order to better understand the customer’s goals, priorities, financial profile etc., and be able to provide the best possible advice; the actual process of setting up a customer account can be made self-serve with an easy to use digital processes. As another example, some customer segments today, such as millennials, are very comfortable using digital and robo-advisory platforms that provide automated, algorithm-driven investment services with little to no human supervision. These platforms have high elements of self-serve with easy to use processes for digital onboarding, automated investment management and easy to access reporting. At the same time, other customer segments, may actually seek high touch, in person services for onboarding, advice, investment management and reporting.

To enjoy a competitive advantage in the 'new normal', a more digitally-enabled business will be a key requirement, combined with clear choices along client segments and service models. While most wealth managers give priority to digitization around client onboarding, leading firms have started to provide digital support to the traditional human elements of the client life cycle: client advisory5.

Determining the digital platform strategy:

Today, there are many Wealthtech platform providers who offer digital platforms for all points across the wealth management value chain - client acquisition, client relationship management, product & investment management, portfolio / trust administration, reporting, risk, compliance and other administrative functions. At the same time, wealth businesses also have their own in-house platforms and applications (in many cases legacy applications) that serve their current needs but may lack all of the capabilities provided by these newer digital platforms. While selecting new digital platforms, wealth technology leaders have a choice to make – whether to pick one single platform to serve their entire wealth value chain or to pick multiple different platforms that each serve specific areas of the value chain and just plug them in as needed into existing parts of their current technology architecture.

Wealth technology leaders need to understand their organization structure, and the suitability, cultural flexibility and openness across the entire organization for new innovative digital platforms. For example, some large wealth management firms (e.g. large banks) often have multiple lines of businesses with differing P&Ls. In such large organizations, opting for one single unified digital platform that serves the entire wealth value chain, can often run into conflicting priorities, objectives and demands across these lines of businesses as well encounter cultural rigidity to change, leading to the digital transformation exercise potentially going off the rails and just burning dollars. Wealth firms thus need to evaluate their digital platform strategy to determine which aspects of the value chain will be core to their value proposition (and therefore key to differentiation) and which can be delivered through strategic partnerships. A robust understanding of an organization’s strengths will aid in defining the right partners, the right roadmap, and the right execution model that will eliminate silos and maintain alignment to core strategy and business principles6.

Portfolio approach to funding and managing transformation initiatives:

An HBR study7 of the disaster cases in transformation journeys suggested three serious deficiencies in practice that involve both general management and technology management. The first two are the failure to assess individual project risk and the failure to consider the aggregate risk of the portfolio of projects. Wealth technology leaders, can avert many of these transformation fiascoes by assessing the risks—singly and as a portfolio—in advance of the transformation initiatives implementation.

Most companies invest in digital transformation initiatives along a broad spectrum of risk and reward. As in financial investing, the overall goal in a transformational journey should be to construct a portfolio of initiatives that produces the highest overall return that’s in keeping with the firm’s appetite for risk.

Another HBR study8 looked at the allocation of funding and resources in companies, across their core, adjacent, and transformational initiatives and found that companies that allocated about 70% of their innovation activity to core initiatives, 20% to adjacent ones, and 10% to transformational ones outperformed their peers as reflected by share price. However, the return ratio on these innovations was roughly the inverse of that ideal allocation described above, i.e. Core innovation efforts typically contributed 10% of the long-term, cumulative return on innovation investment; adjacent initiatives contributed 20%; and transformational efforts contributed 70%.

Wealth firms should articulate a clear innovation ambition; have the right balance of core, adjacent, and transformational initiatives across the enterprise; and should put in place the tools and capabilities to manage the transformation initiatives as parts of an integrated whole. Rather than hoping that their future will emerge from a collection of ad hoc, stand-alone efforts that compete with one another for time, money, attention, and prestige, they should manage for “total innovation.”



Radhika Bansal
Senior Manager, Consulting
Tel : 416-775-8518

Vithal Ketkar
Manager, Consulting
Tel : 416-601-4369


  1. Deloitte, Empowering the virtually enabled advisor
  2. Deloitte, Navigating towards a 'next normal' after COVID-19 - Lessons from APAC Wealth Managers
  3. Deloitte, Digital Transformation Playbook Release 4.1
  4. Deloitte, Wealth management and advice in the time of coronavirus - A Deloitte perspective on industry impact of COVID-19
  5. Deloitte, COVID-19: Digitally-enabled Wealth Managers will lead the way in the 'new normal'
  6. Capco, The evolution of the Financial Adviser Platform
  7. HBR, Portfolio approach to information systems
  8. HBR, Managing your innovation portfolio

This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

Did you find this useful?