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Four Information Management Barriers Wealth Management Professionals Face

The digitalization of the wealth management industry has brought on unique demands, shifting from personal interactions to multi-communication channels.

With the onset of our new hybrid reality, the concept of the way we work has changed dramatically. Recent research from Deloitte found that the digitalization of the wealth management industry has brought on unique demands, shifting from personal interactions to multi-communication channels.

However, many firms haven't kept pace and don’t provide clients with the seamless and frictionless communication needed. Wealth management professionals must be able to manage documents, automate key business processes and meet regulations, without the need for stressful data migrations.

Here are four of the critical challenges wealth management firms must overcome to reduce business risk and improve the efficiency and scalability of high-value client relationships:

Managing Client Expectations While Automating Processes to Increase Profitability

While new technology solutions have been propelled by digital transformation, they have also created a fragmented workflow resulting in a loss of productivity and profitability. Now more than ever, clients expect more for less, which has resulted in margin compression.

Wealth management professionals should feel empowered to spend less time on non-revenue generating work by making information easier to locate and automating routine tasks to increase productivity and efficiency. Doing so helps firms increase margins by allocating more time to their most productive clients.

Firms should turn to intelligent software applications that enable hybrid work and transform collaboration to help access the right information, at the right time -- supporting more informed decision-making and the suitability of investment recommendations.

Reducing and Mitigating Risk Exposure of Non-Compliance

Firms handle a tremendous volume of confidential client information, from details about estate planning and investment portfolios to planning financial goals. This sensitive information needs to be protected and secured at all costs, as a data breach can be costly for organizations to mitigate, and more often than not, result from human error. Verizon's 2022 Data Breach Investigations Report found that 82% of breaches were found to be caused by mishandling of information.

Risk exposure can be reduced and mitigated by minimizing human interfaces and the opportunity for error. Wealth management firms need to ensure they have a flexible information management environment to help address data security concerns. With a metadata-driven document management platform, companies can guarantee that only the right people have access to consequential information. Implementing collaborative platforms reduces exposure to human errors related to document versions and approval processes. Safeguarding sensitive client data to be viewed, edited, copied, or downloaded only by authorized users further reduces the risk of litigation or a damaged reputation arising from data leaks.

Lessening the Burden of Audits Across Books of Business

As firms transition to our hybrid work reality, many struggle to have a single source of truth amid the growing abundance of information. With the upsurge in client demands brought on by digital transformation, wealth management professionals need to ensure they have the technical capabilities to sift through their data to find exactly what an auditor, team member, or client needs at any given moment.

Firms need to easily access and securely share the correct documentation with auditors to prevent audits from slowing business to a near halt. Using automation for the increased data volumes can help streamline the audit process by providing immediate availability and access to critical information. Information management processes can further allow staff to more readily meet the needs of regulatory compliance, audits, and litigation -- and even handle disputes quicker, with less stress. By providing instant audit trail visibility for all documents, firms can enable fact-based decision-making to ease control oversight and show evidence of compliance.

Prioritizing High Client Satisfaction and Cultivating Those Relationships to Upsell and Cross-Sell

As traditional methods of communication continue to evolve, wealth management professionals find themselves spending more time searching for the proper documents or projects rather than focusing on high-value clients and developing those relationships. Staff can find it hard to locate the correct information when a client has an inquiry that requires a timely response. Enabling more effective and scalable customer service through securely integrated information management applications improves and further cultivates those relationships.

In a digital world, poor communication can result in lost clients, so wealth management firms need to keep communication across all lines of business timely and relevant. Better information management practices can result in increased client satisfaction due to faster responses to inquiries, more informed decision-making, and improved alignment to support the suitability of investment recommendations. Proper applications make it easy to improve client satisfaction by seamlessly managing information between the firm and clients through an integrated collaborative workspace. An information management platform with a flexible, integrated architecture allows firms to securely and seamlessly share and collaborate on documents with external parties.

As the shift to hybrid work continues, wealth management professionals must be prepared to serve changing client needs in a digital environment. To modernize, firms should look to support long-term strategic decisions by implementing innovative information management software that not only helps make information easy to find and use, but also automates tasks to improve workflows. Streamlining communication processes enables advisors to spend more time with clients and generate new high-value opportunities, enabling increased revenue and productivity. Digital solutions and intelligent automation approaches take the complexity out of outdated data systems and provide employers with a future-forward strategy in our new hybrid reality.

Ville Somppi is Vice President of Professional Services Solutions at M-Files.

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