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How To Transform Hyper-Personalization in Financial Advice

Key takeaways

  • Financial planning literacy is important for clients to stay in control of their wealth management.
  • Digitalization can remove the stigma and anxiety of stepping into the wealth management field.
  • Personalized and continual education has the potential to alleviate the wealth divide.

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Michael Hom

Head of Financial Services Solutions at InterSystems

Head of Financial Services Solutions at InterSystems

Qn 1: What are your thoughts on the recent increase in hyper-personalization in financial advice?

Answer: It’s a promising venture that augmented customer interactions have allowed services to be provided to a larger and broader set of clients. Personalized financial advice creates the opportunity to solve some divides in the industry, such as the wealth gap. Questions about mundane but significant events can be answered with ease and convenience. It empowers clients in their approach to wealth management. Companies should embark on digital transformations that include data strategy to keep up with the changing behaviors of clients. Despite the potentiality, there are trust and privacy concerns to overcome, which safe structures can be set up for a wider-ranging set of users.

Qn 2: What is an example of how personalized financial advice can work in the future?

Answer: Wealth management could be integrated into everyday life. There could be advice available 24/7 to help with life events and stages. Digital platforms could advise on the impact of past financial decisions, and provide recommendations for future decisions, every step of the way. This is a tool with much potential to improve clients’ lives, without going the extra effort to find a financial advisor physically. Whether clients want to make their own informed choices with the available information or prefer prescriptive advice telling them what to do, digital tools would gradually build trust in and educate the clients.

Qn 3: How do you think the use of hyper-personalization will change banking over the next 5 years?

Answer: Open banking is a potential option to facilitate data dissemination across a wider range of consumers, although there’s a need for better regulations. WealthTech will be crucial in bridging the gap between these aspects where services and information are made available. This will lead to vastly improved and diversified services for all, levelling the playing ground and empowering the consumers. From an institutional standpoint, more automation is needed as people become more digitally focused and data-driven. We will need a whole gamut of personalized services and interactions – from human to fully digital. Hopefully, financial advice will be accessible to everyone.