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How COVID-19 Will Change Wealth Management

Miles Joseph, 16 April 2020


Unsurprisingly, the pandemic is going to change the wealth management sector in various ways along with so many other features of our commercial world. This article considers key themes.

Moving on from automation of processes, firms may consider that it may now also be the time to initiate an AI programme. With humans in the loop embedding knowledge, AI can apply techniques such as Natural Language Processing (NLP), Automated Reasoning and Machine Learning to such diverse activities as client acquisition, advice, onboarding, executing instructions, flagging financial or clients at risk, and personalised reporting near real-time. These techniques may provide the means to adapt and develop propositions and processes more readily as the market evolves. 
Suppliers: Firms need to carefully review the resilience of their suppliers. 

Firms (or their providers) may have elements of operations or delivery outsourced and/or off-shored. The lockdown response to the COVID-19 pandemic in many offshore locations has been extreme, and in many regions with no opportunity or capability for WFH. This has caused some firms to fail-over to an onshore model, with the consequent capacity constraints. Longer term, it may be appropriate for firms to re-consider their off-shore (or outsourced provider) relationships to ensure that they can guarantee resilience in their operations. 

Competitors: Competitors will also be adapting to challenges to varying degrees. Open dialogue with competitors may reveal partnership opportunities, such as the setting up of shared utility services that benefit all parties without compromising the firm's USPs. There may also be acquisition opportunities to look at with distressed competitors.

Staff: Across the world, the COVID-19 crisis has and will cause trauma for many, with the loss of loved ones, the social impact of isolation, economic impact and hardship, and the consequent and very significant impact on physical and mental health. Firms will need to invest far more heavily in health and wellbeing for their staff, as well as financial support programmes. 

Amidst all this, roles will be changing, and through automation and digitalisation, fewer staff may be needed. Office space can also be reduced with many adopting a significant WFH model. 

The shape of the “new normal” will emerge over the forthcoming months. Post-crisis the relative competitive advantages of firms will be re-sequenced. How well firms will fare in the bounce-back will be due in part to how open they are to making bold moves to adapt to this ‘new normal’. 

Leadership with integrity will be vital to provide a foundation to rebuild morale and positive sentiment, and to develop and communicate a clear vision for the strategy of the firm. 

About the author
Miles Joseph is an independent consultant with more than 25 years in wealth and investment management. He specialises in helping wealth firms shape strategy and the design, build and launch of innovative client propositions, operating models and technology solutions.

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