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Wealth Management Platform Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

Wealth Management Platform Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

  • August 2021
  • 121 pages
  • ID: 6134954
  • Format: PDF
  • Mordor Intelligence LLP

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The global wealth management platform market was valued at USD 3.27 billion in 2020, and it is expected to reach a value of USD 7.02 billion by 2026, registering a CAGR of 13.87% over the forecast period 2021-2026.


Robust wealth management platforms offer support for a broad set of digital channels such as smartphones, tablets, and browsers. Supporting cross-channel experiences reduces friction for financial institution’s customers and financial advisors resulting in more efficient operations. As trading and investment management fees go to zero and firms grapple with decreasing margins, they have the requirement to digitize operations and find efficiencies elsewhere. Customer-centric business priorities, such as fully digitized client onboarding, goal-based financial planning, and secure, real-time collaboration between the client and financial advisor, make wealth management platforms stand out. Some platforms offer AI components such as machine learning, natural language processing, and digital process automation to reduce exceptions, making the onboarding process paperless and frictionless.
As multiple investors seeking advice for withstanding the current uncertainty in the investment environment, fintech companies are launching wealth management platforms that give wealth managers the insights and data they require to understand better and serve the needs of multiple clients. For instance, in June 2020, Fidelity National Information Services, Inc. launched FIS Unity, which utilizes open application programming interfaces (APIs) to give wealth managers a complete, integrated view of a client’s financial assets across several financial providers. Using the system’s analytics tools and intuitive dashboards, wealth managers can gain insights into their clients’ investment history, lifestyle changes, and investing preferences, enabling managers to offer personalized investment recommendations that meet clients’ current and future needs.
In May 2020, Infosys announced a strategic partnership with Avaloq to provide end-to-end (e2e) wealth management capabilities through digital platforms. Infosys will act as an implementation partner for the company’s wealth management suite of solutions to help clients transform and modernize their legacy systems into efficient digital advisory platforms. Infosys will utilize a standardized approach and its Global Delivery Model to implement Avaloq’s solutions for clients. Infosys will work together with Avaloq to develop market opportunities beyond Switzerland and go to market capability for targeted accounts across multiple geographies. With a primary focus on Europe, Middle East, Africa, and Asia-Pacific regions, the partnership aims to offer e2e products and services as Software-as-a-Service (SaaS), private cloud, or public cloud across the globe.
In August 2020, Lu International (Singapore), a subsidiary of China’s retail fintech enterprise Lufax Holding, along with ASIKORNBANK announced a partnership to form an online wealth management platform for retail investors in Thailand. The platform named LU Global said it offers customers with round-the-clock access to a wide range of high-quality investments. The platform has instated a risk management system that adopts Know Your Product (KYP) and Know Your Customer (KYC) compliance procedures, alongside an Anti-Money Laundering (AML) and anti-fraud system. Lufax Holding will utilize its cloud-exporting model for the platform, which will be jointly operated and managed by both parties. The partnership is expected to increase the pace of digital transformation within the financial institution industry in Thailand and across the Southeast Asian region.
The COVID-19 outbreak has prevented millions of people from gaining access to critical advice around investments and their finances. The pandemic has hugely impacted trading and investment, and multiple companies are improving their trading platform services to provide a scalable and reliable platform, which simultaneously offers access to global markets as well as insight into a range of trading strategies, and up-to-date market valuations and investment services. For instance, in May 2020, ITI Capital, a global financial services provider for institutional investors and private clients, has launched a new digital wealth management offering for investors during the COVID-19 crisis. The latest offering gives users instant online access to detailed financial and investment advice, using artificial intelligence and fintech.


Key Market Trends

Banks are Expected to Hold Significant Share


Banking institutions are largely focused on enhancing customer experience by providing them with integrated solutions through unified platforms. Banks are undergoing the replacement of legacy, in-house core banking systems to transform them into the next generation banking and financial service providers.
For instance, in July 2021, Cincinnati, Ohio-based Fifth Third Bank selected financial technology company FIS to replace its legacy deposit and trust servicing systems with FIS’s next-generation platforms. The platform will help the bank replace its legacy, in-house developed core banking system with the next-generation FIS Modern Banking Platform.
It will be delivered as a managed service to further accelerate its digital transformation and better serve its customers through a modernized platform while also generating operational efficiencies and scale benefits. Also, the bank will deploy FIS Unity, a global wealth management platform that is fully integrated with FIS trust accounting, which provides users with the data and insights they need to better serve investors throughout their wealth journey.
Wealth Management Platform increases the trust amongst the banking customers, as they feel their investments to be safe, which leads to more robust engagement and increases the further investment willingness. The platform is expected to serve the growing demand for advisory services and drives down the administrational efforts and operational costs, resulting in a significant increase in effectiveness and efficiency throughout the advisory network.
Multiple companies in the market offer a wealth management platform exclusively for core banking abilities. For instance, Avaloq Banking Suite’s flexible architecture allows for custom solutions and integration with third-party apps to create a personalized experience for the end investor and advisor. Avaloq Banking Suite’s can create consistent client and advisor solutions using personas and a dynamic goals-based wealth management module that automatically adapts to the client’s wealth and life situations using probability algorithms.
Several banks are launching wealth management platforms. For instance, in January 2020, private sector lender IndusInd Bank launched its wealth management platform, Pioneer Banking, catering primarily to high net-worth customers. Based on the bank’s research-based capabilities, the new service merges wealth management solutions with an array of personal and commercial banking products.
In July 2020, Barclay’s bank introduced a hybrid digital wealth management service for current account customers with a minimum of EUR 5000 to invest. The latest service, Barclays Plan & Invest, developed in collaboration with Scalable Capital, is expected to create a personalized investment plan tailored to a customer’s goals, with Barclays then managing the investments on their behalf. The growing adoption of digital and mobile banking is expected to positively impact the market as more banks incorporating their wealth management solutions through online banking.


North America is Expected to Hold Significant Share


Wealth Management offerings in the North American region are becoming essential to attract and retain profitable retail customers. For instance, affluent mass customers in the region represent a significant part of the net income generated by retail banks. It is expected that their relationship with a provider of wealth management services as their most important financial relationship. As a result, many diversified financial services firms in the region expand on their wealth management businesses.
The industry in the region is in the midst of significant change where a new generation of investors, whose expectations and preferences have been shaped by new technologies and by their living through the last financial crisis, have brought new standards to the industry in terms of how investment products are being delivered.
In January 2020, Pascal Financial, an emerging fintech company with Canada’s only fully integrated, AI-powered digital wealth management platform announced that it had integrated its digital wealth platform with Sterling Mutuals, one of Canada’s premier independent mutual fund dealers with over USD 4 billion in assets under administration and almost 300 advisors and support staff. Pascal will be working with Sterling’s advisors to promote the digital tools they need to thrive in a time of disruption. Pascal’s advanced functionality and user design, client, and advisor advanced alerts engine, client engagement and behavioral finance tools, investment portfolio tools, and compliance are expected to provide Sterling a significant edge in the industry.
In July 2020, New York-based Apex Clearing announced a new integration with Marstone, a digital wealth management platform, via a strategic partnership. According to Apex, the business will benefit investment management firms insurance companies and organizations with large financial services practices and those expanding into the financial services, who face a demand for digital experiences and capabilities from their clients. The partnership is forged with a joint-client mandate as its initial collaborative project, and Apex expects that project to go live in the coming months. In the future, innovations such as advisor tools, are planned for the platform. Marstone, also based in New York, currently has integrations with banking platforms, investment managers, and account aggregators.
Also, many financial advisors are launching their wealth management platform by partnering with other financial firms to offer day-to-day operations services. For instance, in November in 2020, LPL Financial LLC, a prominent United States-based retail investment advisory firm, independent broker-dealer, and registered investment advisor (RIA) custodian announced that few of the financial advisors launched their independent practice, Adara Wealth Management, through affiliation with LPL Strategic Wealth Services.


Competitive Landscape

The intensity of competitive rivalry is high, and the emergence of new software providers is growing globally. Particularly in emerged markets such as India, for instance, multiple start-ups have emerged in the domain, giving market incumbents a considerate amount of competition. The nature of the market studied makes it crucial for new market players to constantly keep track of the technological advancements, regulatory dynamics to maintain compliance while offering upgraded functionalities to the end-users. The rivalry is also heightened via multiple inter-industry partnerships and acquisitions. This puts new players’ positions in jeopardy.

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