Market Trends of Wealth Management Platform Industry
Investment Management Firms are Expected to Drive Market Growth
- Investment management is handling financial assets and other investments by professionals for clients, generally by utilizing strategies and executing trades within a portfolio. The investment management industry has significantly changed over the years due to several developments, such as digitalization and automation. Low yields and increased volatility have considerably driven portfolio managers to implement sophisticated strategies straining their existing infrastructure. The use of derivatives has grown significantly, but most firms have concerns about their ability to handle them.
- In addition, global regulation has become much more pervasive on the buyer side, resulting in operational and compliance challenges for investment managers. New reporting, clearing, and margin requirements rules are pushing firms to revamp their processes and replace legacy systems. All these factors are driving investment management firms to utilize wealth management solutions.
- Various wealth management platforms in the market have a control center that offers users real-time portfolio insights and the ability to act instantly. The workstation organizes all position and risk data, ensuring that investment managers work with up-to-date and accurate information.
- In June 2023, PureFacts Financial Solutions, a revenue management solutions supplier for the investment management sector, stated that its fee and billing calculation engine would be integrated into Pershing X's Wove wealth management platform, a technology provider and new business unit of BNY Mellon. Wealth management organizations using the Pershing X platform can better account for every dollar of value with less overhead and more automated, accurate, and repeatable workflows with the integration of PureFacts.
- According to a report published by CNNIC in February 2022, China witnessed more than 194 million online wealth management users in 2021. The country is also seeing a rise in the Fintech industry. The economic rise created a wealthy class of high-net-worth individuals with a demand for investment opportunities.
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North America is Expected to Hold a Significant Market Share
- The United States represents the largest economy globally and has been a significant market for wealth management platforms in the North American region. Several trends, like the advent of blockchain, machine learning, natural language processing, digital process automation to reduce exceptions, and a push toward digitalization are aiding the growth of the market in the region.
- Wealth management offerings in the North American region are essential to attracting and retaining profitable retail customers. For instance, affluent mass customers in the region represent a significant part of the net income generated by retail banks. Their relationship with a provider of wealth management services is expected to be their most important financial relationship. As a result, many diversified financial services firms in the region expanded their wealth management businesses.
- The industry in the region is witnessing a significant change where a new generation of investors, whose expectations and preferences have been shaped by new technologies and their living through the last financial crisis, have brought new standards to the industry regarding how investment products are offered.
- In May 2023, American Bank & Trust joined forces with wealth tech Marstone to provide a digital wealth management platform across its locations. The bank provides a wealth management solution through its trust arm, which manages more than USD 300 million in assets. Marstone's wealth management-as-a-service business intends to grow by boosting productivity to maintain existing client deposits and attract new retail bank customers.
- Customers in the region are shifting away from risk-based portfolio construction to outcome-based planning across multiple dimensions (such as investments, banking, health, protection, taxes, and estate). In addition, client expectations are rising rapidly for things like virtual engagement, seamless app experience, omnichannel support, and instant payments at a pace set by industries outside of financial services. These changing trends are expected to drive the market.
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