Wealth Management IT Spending 2016: A Global Perspective

by Ashley Globerman, May 16, 2016
Industry Trends
Global

Abstract

In this report, Celent analyzes global and regional wealth management technology spending for 2014-2020. The study highlights the top trends affecting the North American, European, and Asia-Pacific wealth management industries and analyzes the implications for IT spending. Celent estimates the proportion of spending on system areas, technology areas, and maintenance versus new investments on a global level and for each of the three regions.

Celent has estimated that wealth management IT spending reached $5.7 billion in 2016 and will reach approximately $7.5 billion by 2020. APAC still accounts for the lowest total spending among regions, however; the growth rates for both APAC and North American markets are higher than that of Europe.

“The wealth management markets in North America, Europe, and Asia-Pacific vary in their maturity, sophistication, vendor ecosystem, and investor preferences,” says Ashley Globerman, an analyst with Celent’s Wealth Management practice and author of the report. “As such, the opportunities for wealth managers and technology providers are unique to each region.”

Other major findings in this report include:

  • There has been extensive focus on investments in front office tools for advisors and end users. North America and Europe invest more in front office than APAC, but Celent envisages APAC expanding their investment in this area.
  • The modernization of legacy systems, consolidation of platforms, integration of data systems, and outsourcing of noncore activities continue to drive IT spending initiatives.
  • Internal spending has traditionally been the largest IT expenditure among wealth managers. IT spending across internal and external systems varies per region; however, spending on external software and services are the fastest growing areas for 2014-2020.
  • New digital platforms are attracting clients, while also yielding a new “hybrid” investor, all of which is challenging the traditional wealth management industry.
  • The majority of the revenues for technology providers continue to come from maintaining older systems, but spending on new projects is growing at a faster rate than maintenance.
  • The stringent regulatory environment continues to put pressure on operating models and revenues.
  • The automation of certain processes is recognized as valuable in saving time and cost.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

1

Introduction

3

 

Key Research Questions

3

 

Definitions

3

Global Technology Trends

6

 

Implications for Global IT Spending

8

Regional IT Trends in Wealth Management

12

 

North America Spending

12

 

European Spending

15

 

Asia-Pacific Spending

18

Conclusion

22

Leveraging Celent’s Expertise

23

 

Support for Financial Institutions

23

 

Support for Vendors

23

Related Celent Research

24

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