Top 5 Wealth Management Technology Challenges Addressed by the Cloud
Wed, 01 Feb 2012 15:19:11 GMT
As market data volumes continue to grow exponentially, so too does the burden on wealth managers and financial advisors to identify ways to harness the power of market data and transform it into a meaningful competitive advantage. What’s required is a cohesive market data management strategy that not only simplifies internal operations, but also lays the groundwork for tools that enhance engagement with customers.
Introducing the market data cloud
Cloud technology available today is transforming the way wealth managers and financial advisors manage market data across the enterprise and communicate with clients. Market data clouds enable firms to bypass the sizeable investments in infrastructure, hardware, software, and maintenance that are typically associated with traditional datafeeds. A cloud-based market data management solution helps firms gain economies of scale, lower costs, and increase agility.
Below are five wealth management technology challenges that are addressed by the adoption of a cloud-based data management solution. Future posts in this series will expand on each of these areas.
Wealth management technology challenge #1
Simplifying data management
The daily flood of market data shows no sign of slowing down—in fact, experts project it to accelerate in the coming years. This means that a market data solution must easily scale to meet the needs of tomorrow.
A cloud-based market data solution reduces data management frustrations. The headaches of integrating traditional datafeeds —flat file processing, data cleansing and parsing, network infrastructure, and ongoing system maintenance—disappear with cloud APIs that deliver market data directly to end-user applications.
Wealth management technology challenge #2
Developing new strategies to satisfy more sophisticated customers
In response to the recent economic downturn and substantial losses in the equity markets, wealth management clients are increasingly skeptical of the value that advisors provide. In addition, the ubiquitous availability of financial information and advanced trading capabilities has resulted in greater customer sophistication, requiring advisors to expand their reach and develop new strategies that differentiate.
The market data cloud offers advisors the ability to quickly develop new strategies with instant access to a broad range of financial information spanning equities, fixed income, commodities, options, futures, foreign exchange, mutual funds, and more. Armed with on-demand, real time information, advisors can respond to client demands more efficiently.
Wealth management technology challenge #3
Staying connected with customers 24/7
One of the key considerations driving any data management strategy is how to leverage technology to forge stronger client relationships. Wealth management customers, particularly the new generation, expect detailed real-time market information wherever they are, whenever they want it. Advisors that deliver branded customer portals or data-rich mobile applications stay better connected with customers while enhancing transparency and trust.
A cloud-based market data solution is well equipped to meet online portal and mobile application challenges head on. Cloud-based web APIs stream real-time and referential data to mobile apps seamlessly. With a market data cloud, firms can reduce the development cycle and launch branded customer portals and mobile applications in less time.
Wealth management technology challenge #4
Reducing market data expenditures
In today’s cost-cutting environment, market data expenditures are under the microscope. This encompasses the cost of the market data itself, as well as the infrastructure and maintenance costs associated with data management.
A cloud-based market data solution enables wealth management firms to optimize market data spend across both of these parameters. The on-demand pricing structure of a market data cloud solution means that advisors only pay for the data they use. And integrating market data directly from the cloud enables firms to sidestep costly data management efforts.
Wealth management technology challenge #5
Building proprietary investment models and reporting capabilities in Excel
Microsoft Excel is a critical application for investment research, monitoring, and reporting. Financial advisors require a market data solution that seamlessly integrates real-time information into their proprietary Excel spreadsheets. But to get this capability in the form of an Excel add-in, advisors often have to pay a premium for desktop terminals, ranging from $5-15K per user per year.
A cloud-based market data solution easily integrates real-time and referential market data into Excel via flexible web APIs, enabling advisors to consider cutting the cord on terminals altogether. All that’s required is a few lines of code and an internet connection.