RiskTech Forum

Capco: Digital Risk Management

Posted: 1 December 2016  |  Source: Capco

The Wealth Management industry is undergoing an unprecedented wave of digital transformation. Wealth Managers are transforming their operating models and underlying infrastructure to be fit for purpose in a digital age. Coupled with changing client needs, the momentum of digital change in Wealth moves forward at pace presenting Wealth Managers with a number of opportunities but equally exposing them to emerging data security risks. The drivers include continuous advances in technology, competition from fintech startups eroding parts of the wealth value chain, the availability of big and thick data and the need to cost-optimise and drive straight-through processing (STP). Combined with the proliferation of social platforms, the changing regulatory landscape and the rise of the new data security threats, you have a 'perfect storm' of challenges to traditional Wealth Management operating models.

In this context, Wealth Managers are pushing forward with their digital transformation programmes. Their goal is to offer clients engaging, data- and functionality-rich, secure multichannel experiences that provide access to their wealth anytime, anywhere. In parallel, Wealth Managers have been equipping their Relationship Managers and Private Bankers with powerful digital solutions to further improve their productivity, regulatory compliance and quality of advice and service provision.

These digital improvements are not limited to the front office. Significant transformation is impacting the entire  front-to-back operating model, with the objective of fully harnessing the revenue, cost and compliance benefits of digital. The digital wealth economy is now truly in full swing and transforming the competitive landscape forever. In this new landscape, Wealth Managers are being exposed more than ever to digital risks to client privacy and data security which are not fully understood and holistically addressed by current digital transformation programmes. A revised approach needs to be adopted to enable Wealth Managers to capitilse on the opportunities and mitigate the risks of the digital wealth economy.

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