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How Data Visualization Will Change Wealth Management

The amount of data being generated each year is growing exponentially. More data has been created in the past two years than in the entire previous history of the human race. By the year 2020, about 1.7 megabytes of new information will be created every second for every person on the planet.

With exploding growth in data volumes comes the need for businesses to organize, interpret and act on data in real time to stay competitive. Data visualization, the presentation of data in a vivid and visual context, is finding its way into the wealth management industry as firms look for more efficient ways to monitor the effectiveness of their products, strategies and resources, and it could be one of the more significant developments since the release of Excel.

Industry firms are not only looking to pull reports from data, but to use data to make more informed investment and business decisions.

Wealth management firms, asset managers and broker/dealers have expressed a need to readily compare and contrast assets under management, account growth and fund inflows and outflows across different time periods, accounts and between different managed-account sponsors and managers. The industry is also seeking new ways to curate and display important data views in easier, more accessible and meaningful ways to help achieve greater insight and understanding of their business, as well as their clients.

New data visualization techniques are being developed for managers, sponsors and sales organizations to more effectively dive into and understand their data. For example, a manager may want to know the effectiveness of their sales groups, whereas a sponsor may want to know what their distribution of data might be around managers. By giving different audiences access to the same information, one central database can allow many different users to access the data in the ways they want and need.

In the future, asset managers in the model management space can look forward to data views and visualization capabilities that allow them to learn how their models are being used and distributed, and how they perform. They will also be able to compare and contrast model usage and penetration across sponsors and identify important trends.

For sponsors, the future will bring data visualization of their model data to enable them to quickly identify the top investment managers, strategies and financial advisors, and readily compare and contrast each category. The integration of data and digital processes makes this all possible.

Keeping in step with client demands and peers in the industry means firms must adopt data visualization techniques to explore data and identify and track key performance indicators. To stay competitive, firms will need immediate access to data in easy-to-digest and useful formats.

Michael Snizek is a Product Manager for Investment Services at Fiserv and leads the division’s data analytics initiative.

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