Digital Disruption in Wealth Management - FinanceConnect Singapore

Digital Disruption in Wealth Management

David P. Wilson Global Sales and Marketing / Head of Strategic Analysis Group

Capgemini

Agenda

A (Very) Quick Introduction

How Much Millionaire Wealth Exists in the World?

What Forms of Disruption Impact the Wealth Industry?

What does “Digital Disruption” Look Like?

How Can Firms Move Forward?

Q&A

For 18 years, the WWR has been the benchmark

Changing

HNWI

Behaviors

Offshore vs.

Onshore Capital

Flows

Change and

Innovation in

Private

Banking Ultra-HNWIs

Specialized

Products and

Strategies

Europe vs.

North America

HNWIs

Impact of New

Market

Realities on

HNWIs

Institution-

Like HNWI

Behaviors

Mid-Tier

Millionaire

Challenge

Globalization

and Wealth

Transfer

Needs-Based

Client

Service Models

Meeting Needs

of Growth

Markets

Adapting to

New Market

Realities

Change in

Investor Psyche

post Crisis

Leveraging

Enterprise

Value

Developing

Scalable Business

Models

Regulatory

Impacts on WM Firms

and their Clients

Digital Opportunities

for Wealth

Management Firms

Global HNWI wealth up 13.8% in 2013

* Forecast

Source: Capgemini Financial Services Analysis, 2015

www.WorldWealthReport.com

CAGR

2013–2016F

Europe

North America

Asia-Pacific

Latin America Middle East Africa

Global

6.4%

9.8%

7.1%

2.3%

6.0% 6.6%

6.9%

Wealth expected to pass $64 Trillion by 2016

HNWI Investable Wealth Forecast by Region

7.37 9.65 10.82 10.71 12.02 14.2018.80

9.0610.67 11.64 11.37

12.7014.88

17.90

8.32

9.5010.19 10.07

10.90

12.39

15.20

5.79

6.667.27 7.07

7.54

7.70

8.20

1.40

1.471.65 1.67

1.81

2.11

2.60

0.84

1.011.15 1.12

1.25

1.34

1.6

0

15

30

45

60

75

2008 2009 2010 2011 2012 2013 2016F*

HN

WI

Investa

ble

Wealt

h

Total 32.77

Total 38.96

Total 42.73Total 42.00

Total 46.22

Total 52.62

6.9%

Annualized

Growth

Total 64.3

1.60

Clusters of HNWI population and wealth growth

HNWI Population vs. HNWI Wealth Growth Across Key Markets, 2008–2013

Note: Size of the bubble represents HNWI wealth in 2013; Hong Kong has not been placed to scale on the graph as it is an outlier



United States

Japan

Germany

Brazil

China

UK

France

Mexico

Australia

Austria Russia

Argentina

Switzerland

India

South Korea

Singapore

Saudi Arabia

Spain

Netherlands

Italy

Taiwan

Kuwait

Canada

Norway

0%

4%

8%

12%

16%

20%

0% 4% 8% 12% 16% 20%

HN

WI

Po

pu

lati

on

20

08

–2

01

3 C

AG

R

HNWI Wealth 2008–2013 CAGR

Glo

ba

l Avera

ge

(9.9

%)

Global Average (9.9%)

= US$1Trillion

Sample bubble

Hong Kong

28.2% Wealth

27.3% Pop.

Average growth

Below-average

growth

Above-average

growth

Wealth industry faces most disruption since the crisis

Key Drivers of Disruption in the Wealth Management Industry


Shifting Client Demographics Increasing Regulatory Pressure

Changes in HNW Client Behavior Advances in Technology Demand

and Capability


Four fundamental digital tailwinds

Disruptive Digital Forces on Wealth Management Industry



Why has the industry not moved forward?

Digital Myths in Wealth Management


“HNWIs do not

want digital tools,

just F2F”

“Digital channels

will cannibalize our

business”

“Advisors will

not use digital

tools”

“True integrated

channel capability is

too difficult”

“It is a low priority

compared to other

issues”


Strong HNWI demand for digital in the relationship

HNWIs Who Expect Entire or Most of Future Relationship With Wealth Management Firm To Be

Digital, By Age (%)

Source: Capgemini Financial Services Analysis, 2015; Capgemini, RBC Wealth Management, and Scorpio Partnership Global HNW Insights Survey, 2014


87%83% 81%82%

76%

66%75%

53% 50%

82%

50%

40%

0%

25%

50%

75%

100%

Asia-Pacific (excl. Japan) Japan RoW

Respo

nd

en

ts (

%)

Under 40 Age 40-49 Age 50-59 Age 60+

65% of HNWIs at risk of leaving firm for lack of

integrated channel experience

HNWI Propensity to Leave Wealth Management Firm Due to Lack

of Integrated Channel Experience (% of Respondents)



63%

70%

68%

65%

0% 20% 40% 60% 80%

$20m+

$10m–$20m

$5m–$10m

$1m–$5m

56%

63%

63%

76%

83%

87%

65%

0% 20% 40% 60% 80% 100%

North America

Europe

Japan

Middle East and Africa

Asia-Pacific (excl. Japan)

Latin America

Global

49%

60%

68%

80%

0% 20% 40% 60% 80% 100%

Age 60+

Age 50–59

Age 40–49

Under 40

Under 40s have highest digital demands

Under 40

40+

HNWI Channel Importance for Different Wealth Management Capability Areas

Note: Weighted average of respondents indicating importance level to difference capabilities per channel


INFORM ENGAGE

TRANSACT


54%49%

65%61%

54%

45% 48%

22%

34%

12%

35%

14%

0%

20%

40%

60%

80%

Resp

on

den

ts (

%)

52%51%

57%53% 55%

52%

46%

25%

40%

19%

43%

20%

0%

20%

40%

60%

80%

Re

sp

on

de

nts

(%

)

59%58% 58%

45%

58%56%

46%

26%

36%

20%

41%

24%

0%

20%

40%

60%

80%

Re

sp

on

de

nts

(%

)

In-Person/

Phone

Internet E-mail Mobile Social

Media

Video In-Person/

Phone


Media

Video

In-Person/

Phone


Media

Video


Overview of Social Media in Wealth Management

DEMAND EXISTS…

… BUT FIRMS

OVERWHELMED BY

CHALLENGES…

… THOUGH

SOLUTIONS EXIST

Social media is at a nascent stage in wealth mgmt


Future leaders will view digital as essential to

providing a seamless client experience

High-Level Digital Prioritization Roadmap in Wealth Management


Core/Strategic Focus Transformation Focus

Shift the business mindset Develop ROI model / cross-enterprise

support

Make build vs. buy decisions

Implement quick wins

to build momentum

Develop big data opportunities


Economy & Finance

Digital Disruption in Wealth Management - FinanceConnect Singapore