Preparing for the Paradigm Shift in Data Management

In 2025, the industry will advance toward a foundation based on trusted, connected data.

Data can offer wealth management organizations extremely useful insights that can improve their operations, and most importantly, create a more meaningful and personalized experience for clients. Historically, data management has been a big problem across the industry — preventing wealth managers and their clients from reaping the benefits of “connected data,” whereby a firm’s platforms and systems “speak” to one another by exchanging data and provide the coherent, near-real-time answers and next steps (from that data) which clients need. In recent years, wealth management firms have been trying to fix the industry’s outdated technological infrastructure — and we expect them to continue making strides in this area in 2025.

No matter what technology enhancements and integrations wealth management firms adopt, they won’t reap any rewards if the data they are using is not clean, trusted, or properly curated. The biggest barriers that our customers have faced with improving data management — from data structure to reconciliation and workflows — all relate to the data itself.

Going forward, wealth management firms and the tech providers that work with them will need to focus on creating the infrastructure to ensure data remains accurate and delivered in real time. Data accuracy, and the timeliness and relevance of data, are threatened every time wealth managers move data around. In many wealth management organizations, accurate data simply shows up too late for clients, potentially harming the advisor/client relationship. To prevent this from happening, wealth managers will need to stop relying on overnight deliveries from third parties, and store their data in-house, where it can be properly curated, cleaned, protected, and delivered when and how clients need it and want to receive it.

The complexity of raw, unclean data requires many steps before it is curated, and ultimately, usable. To make meaningful use of data analytics and workflows, technology vendors, such as BetaNXT, have been working with wealth management enterprises and industry partners to deliver governed data and create tools such as data views and experiences that can be leveraged for their strategies and tailored for users at all levels of the organization. This is a trend which will continue in 2025.

The reliability and accuracy of data depends on thorough, systemic governance. Too many wealth management firms have tended to view governance as something that is a mere process, or after-the-fact checklist. As data breaches at financial services companies continue to draw news headlines and regulatory penalties, firms have realized that data governance requires anticipatory, rules-driven intelligence baked into their data architecture and workflows. Data governance should come from upstream and your suppliers, not created separately, to ensure consistency and connectivity. In the coming year, firms will continue to work closely with ecosystem partners to adopt this type of data governance.

New innovations in connected data are designed to modernize the data experience and simplify the exchange and commingling of internal and external data between wealth enterprises and their partners — removing all of the data management challenges and complexities described above. Once these problems are tackled, advisors in 2025 and beyond can deliver an experience rooted in connected data that is accurate, trusted, and delivered in real time.

Source: WealthManagement.com 2025 Market Outlook