PwC’s 2024 report highlights tech transformation

The global asset and wealth management industry is on the cusp of a technological revolution. A recent survey involving 264 asset managers and 257 institutional investors from 28 countries reveals that disruptive technologies like AI, blockchain, big data, and cloud computing are transforming the sector. These innovations are not just improving operational efficiency but also driving product and service innovation, creating new markets, and reshaping revenue models. In fact, 80% of the surveyed firms attribute revenue growth to disruptive technology, with tech-as-a-service alone potentially delivering a 12% boost by 2028. Disruptive tech is also bringing wealth managers closer to the lucrative mass-affluent market, consisting of individuals with moderate investable assets. 72% of asset and wealth managers believe that these technologies will shift customer preferences, especially among younger generations who are set to benefit from a $68 trillion intergenerational wealth transfer over the next decade. However, the industry faces a pressing challenge: are firms moving fast enough to capitalize on these opportunities? 68% of asset and wealth managers currently allocate less than one-sixth of their capital expenditure to innovative technologies.

Tech transforming wealth management

This poses a significant question for mid-sized companies that lack the scale of larger players and the niche focus of specialized firms. To harness the full potential of disruptive technologies, wealth management organizations should focus on innovating products, engaging mass-affluent clients, forming strategic partnerships, upskilling their workforce, and prioritizing cybersecurity. Expanding into digital assets like cryptocurrencies is also gaining traction, with 62% of firms planning to explore these options within the next two to three years. Cloud adoption is another key enabler for broader tech integrations. 71% of asset managers believe cloud infrastructure will shape the industry’s future in the near term. The largest wealth management groups are already evolving into tech and data firms, opening up new value propositions and strengthening their competitive relevance. With global assets under management projected to reach $171 trillion by 2028, the future of asset and wealth management is poised for substantial evolution. Organizations must act decisively to stay ahead in this rapidly transforming landscape by aligning with disruptive technologies, adapting, innovating, and seizing new opportunities.