How Could New Big Data Technology Benefit Wealth Management Industry?

Big Data is changing the way corporations and financial advisers learn about and validate investment opportunities.

February 13, 2018
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Big Data has become one of the most discussed topics in the financial services industry, given that financial services often have to deal with huge amounts of data on a regular basis. Wealth management is one area of this industry which could greatly benefit from Big Data and the ability to analyse it.

Here is a look at some of the ways Big Data technology could revolutionise wealth management firms and their ability to serve their clients’ needs.

Data Management

One of the key elements of Big Data is that is has the ability to bring lots of complex information together which can be used for numerous purposes. It can display one set of information which has come from numerous different sources, allowing for much easier management of data in general.

This could be incredibly useful to top level wealth management staff, such as chief operating officers, as it allows them to significantly cut down on the time taken to gather and manage data about clients and their needs. This would allow such top-level staff to make more effective decisions regarding company policy and how to go about advising their clients.

Relationships With Clients

Using cutting edge technology which can break down and analyse Big Data could also go a long way in helping to develop relationships with clients. By gathering information about them from social media and other public sources, wealth management advisors could then get a clearer picture about their lives and mentalities, and thus their requirements when it comes to wealth management and investment.

This would create a far more personalised service, capable of providing both clients and advisors with greater peace of mind over how to approach wealth management and get the most out of the service.

Trend Analysis

Another great benefit which Big Data technology provides is the ability to analyse different trends relating to the investment patterns of different clients. Since Big Data is retrieved from numerous sources, wealth management advisors can not only gather information about individual clients, but also large groups of clients and client types.

This opens up greater possibilities for analysing the investment behaviour of client types (e.g. bankers, lawyers, dentists), and can make the provision of advice to such clients much simpler. This would also help wealth management firms to specialise in different areas/niches, as they would know which client types to tailor their service towards (and market the company to).

Larger Client Base

The time and resources freed up through using Big Data technology would undoubtedly allow many wealth management firms to manage a larger client base, especially given the swathes of information they would have on client requirements.

This could lead to the growth of the wealth management sector as a whole, and potentially open it up to a range of new clients/client types. This will, of course, depend on how much any given wealth management firm is willing to invest in Big Data technology, but its incredible potential is likely to attract those that wish to be at the forefront of the industry.

Big Data is ultimately changing the financial services industry at a rapid pace. Adopting Big Data technology is the next evolutionary step for wealth management firms, and further uses will no doubt continue to come to light as it continues to be developed and improved.

Take Advantage of Opportunities in a Global Economy

The global economy is changing the nature of business. As more geographic barriers break down, investors have the opportunity to find new ways to capitalize off of emerging markets. According to recent studies, the expected ROI of investments in emerging markets is 20 basis points above those of more developed economies.

While emerging markets offer many investment opportunities, they also create new risks. Investors must assess the geopolitical variables that could cripple their ability to make healthy returns in certain markets. They must also understand the nature of the industries in every region and look carefully at the trajectory of their net exports. All of these factors would be virtually impossible without investing in big data.

Big Data is Changing the Wealth Management Industry in Surprising Ways

The wealth management industry is evolving rapidly, largely due to changes in technology. Big data, in particular, has played a very important role in the shift. It enables wealth management companies to better assess the needs of their customers and offer more informed financial advice.