Why should wealth managers harness cloud innovation?

How to respond? To overcome these intensifying pressures, wealth managers will need to elevate their performance to new levels. This means transforming what they do and how they do it – and doing it faster.

This would involve gaining higher scalability and speed, while also embracing the ability of technology – as proven in the pandemic – to enable remote interactions when clients prefer them. And by demonstrating what technology can deliver, the pandemic has also done something else: spurred more wealth managers to consider adopting cloud.

Why the growing interest? Because, if you look at the challenges the industry faces and the capabilities that cloud offers, there’s an almost perfect match.

Here we need to delve a little into the technology. In contrast to traditional on-premise IT, cloud-based systems could offer processing power and applications as-a-service. This means you only pay for what you use and can dial capacity up and down instantly to meet spikes in workload.

The result? Variable costs and massively higher speed, flexibility and scalability. Precisely the attributes that wealth managers now need.

If the benefits of cloud for wealth managers are clear, the roadmap to realising them is less so. To date, cloud adoption has been spearheaded by disruptors in less regulated industries. Think players like Netflix and Amazon, who can develop and scale up cloud-based business models at dizzying speeds.

Up to now, wealth management has seen only a few pockets of cloud innovation, driven partially by being a highly regulated sector. But this can change rapidly if firms accelerate a business value-driven approach to cloud. And the business value on offer comes in various dimensions: improved cost and agility; better client and employee experiences; faster development of new services and revenue streams; and a smaller environmental footprint.

When setting out to achieve these benefits, a wealth management firm faces some complex choices. There are very different ‘flavours‘ of cloud – public, private, hybrid – and various types of as-a-service provision, from infrastructure (IaaS), software (SaaS) to business process (BPaaS) and more. So, it’s valuable to have a seasoned business and technology change partner who’s undertaken the journey many times. Someone like Accenture, who recently announced a $3 billion investment in accelerating clients’ move to cloud.

When you do start the transformation journey, it’s probably best to take a step-by-step approach – one focused on realising early benefits to fund progressive realisation of business value through four key phases: migration of data and new application development to cloud; modernisation, involving migrating legacy apps and/or switching to third-party as-a-service alternatives; innovation around new service models; and finally business reinvention. Crucially, there’s a vibrant and growing market of wealth-specific software providers offering to support this journey, such as the recently-recapitalised and expanded InvestCloud.

The overarching message? The scalability, resilience and business value that cloud offers are unmatched. As wealth managers enter a period of continuing volatility, uncertainty and change, seizing the cloud opportunity is rapidly evolving from an option to a competitive imperative.

What’s clear is that, in the future, cloud is expected to be a key part of every successful wealth manager’s business and technology roadmap. And when to accelerate your cloud journey? Today. Or risk getting left behind.