As the global economy is emerging from the shadow of crises, the wealth management arena continues to witness an improved rate of growth. Outsourcing in this sector has been accelerated by the increase in wealth generation all over the world.
Increase in GDPs and growth in market capitalization have fuelled prospects in his direction. In addition, rising figures with respect to High Net Worth Individuals (HNWIs) have raised more demands for outsourcing.
Organizations that deal with wealth management are confronted by a huge number of challenges. They have been forced to reduce turnaround time, follow stringent regulations, improve efficiency, reduce costs, and mitigate risk. All these aspects have driven the focus on technology as the mainstay, in the administration of financial institutions.
Many of the financial companies face stumbling blocks when it comes to applying technological innovations to fulfill their diverse needs. As a consequence, more firms have started looking at outsourcing as an effective solution to their requirements.
Major areas to be covered by outsourcing
A new report from Celent, an international firm that specializes in financial consulting and research, explicates the new trends that have emerged in wealth management. The report titled
`Wealth Management Outsourcing: Vendor Landscape’ elaborates on the future directions that companies will take for sustaining growth.
Celent applies information technology to the management of global financial services, and in this report, it states the significant changes that will occur with technology outsourcing.
The report details the operations of 15 vendors. They include HCL Technologies, Cognizant Technology Solutions, Advent Software, Infosys, and MphasiS. Most of the vendors have similar offerings to deliver in basic requirements. The whole gamut of operations that involve support services, technology, other basic functionalities and operating models have to be implemented.
Areas where suppliers can stand apart from their competition are many. They cover pricing models, special emphasis on selected functionalities and particular segments of the market, web-based offering and local installation with respect to technological tools, and joint ventures with other service providers. Creating a unique wealth management product is also an innovative method to capture the outsourcing deals in the wealth management market.
Wealth managers are often hesitant in outsourcing front office functionalities. Then again, there has been a marked shift in this outlook. More and more firms are taking baby steps in this direction. The wealth management market is evolving and a vivid picture is expected to emerge over the next 18-24 months.