AI, blockchain technology to eventually push the wealth management market to new heights
As the wealth management business increasingly becomes a technology business, the wealth technology market is poised for significant growth and expansion on the back of the momentum of cutting edge technology.
But we’ll have to wait a few more years to see it reach its peak.
A report by Grand View Research predicts that the global wealth management software market will reach $12.07 billion by 2030, growing at a compound annual rate of 13.9% over the next eight years.
The California-based research firm’s 159-page analysis expects market growth to be driven by an “increasing demand for wealth management software by financial advisors to effectively understand the needs of their clients and streamline the financial management of their clients accordingly.”
Researchers say the expanding scope of wealth management software to cover everything from accounting and investment management to estate planning and retirement planning bodes well for the future. At the same time, rapid advances combined with greater use of the latest wealth management technologies are expected to intensify competition between traditional and non-traditional firms.
“The growing number of SMEs across the globe, and subsequently the growing preference of these enterprises for modern solutions based on the latest technologies, such as blockchain and AI, is expected to create new growth opportunities for the (small and medium) enterprises) segment,” says a statement from Grand View Research. “Financial advisors employ financial advice and management solutions to increase productivity, improve workflow efficiency and strengthen client relationships by helping clients achieve their financial and investment goals.”
According to the study, the end-use segment of trading and stock exchange firms is expected to witness the fastest growth during the forecast period as individuals aggressively opt for currency and stock trading to increase their financial gains.
The increasing use of wealth management solutions by trading and listed companies to optimize efficiency and reduce operating costs is also considered positive for the segment.
Discussing the rise in wealth managers turning to AI-powered applications to offer personalized solutions to their clients, researchers say firms are particularly adopting predictive analytics tools based on AI and machine learning to analyze large amounts of data related to investments and predict future trends .
“The growing number of highly networked individuals worldwide is expected to play a niche role in driving product adoption over the forecast period. HNWIs require various services, including investment management services, tax advisory, invoicing services and portfolio management services, among others,” according to the Grand View study.
Researchers also say reducing the manual processes remains a priority, and surprisingly, the outbreak of the COVID-19 pandemic is seen as a boon for new growth opportunities.
“More businesses and individuals are turning to wealth management service providers to seek investment advice and properly plan their investments in the wake of the outbreak of the pandemic,” Grand View Research said in a statement. “As such, market players are responding to the changing demands of their clients and diversifying their solutions and services to manage accounting, estate planning, investment planning and retirement planning for their clients.”
The robo-advisory segment is expected to witness the fastest compound annual rate over the forecast period due to the growing use of the robo-advisory platform to automate portfolio creation based on income, risk parameters and other facets of a client’s investment mandate, according to the study.
More businesses worldwide are also focusing on implementing cloud-based solutions to ensure easy access to data and deliver personalized services to their customers.
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