Wealth managers’ spending on information technology will reach almost $35 billion by 2016 – at an average compound annual growth rate of 7.2 per cent, Ovum, a research firm, predicts in a new report.
Regionally, Central and Eastern Europe will set the hottest pace, seeing a rise of 15.1 per cent, the firm said. In the emerging economies of the Asia-Pacific region, the rate is expected to be 13.4 per cent. For North America, the rate will be 7.0 per cent; in Latin America, 8.1 per cent; in the Middle East, 7.8 per cent; Africa, 9.8 per cent, and for the industrialized nations of Asia-Pacific, 5.3 per cent.
“Increasing profitability is a priority for all financial institutions,” said Jaroslaw Knapik, senior analyst, financial services technology at Ovum. “As the use of digital channels increases, banks will strengthen their focus on mobile channels and self-service functionality in an effort to connect and empower their customers.”
Noting the current development of mobile apps, Ovum said that increased support for smart-phones and tablets will be driven largely by investment from non-financial institutions, as well as the recent advances made in mobile finance platform technology.
Examining different wealth management segments, Ovum said the fastest growth between 2011 and 2016 was seen in the “high net worth banking and financial planning” segment, at 7.5 per cent. Next in line is retail asset management, at 7.3 per cent, followed by retail brokerage, at 6.3 per cent, and mass affluent financial planning, at 7.0 per cent.
Within the UK and Ireland, Ovum forecasts that investment in internet and presence technologies by UK and Ireland’s high net worth banking and financial planning businesses will reach $80.1 million, while retail brokerage and retail asset management organizations will increase their investment to $63.8 million and $42.8 million, respectively.