The Swiss research firm's global report, Digital Account Aggregation in Wealth Management 2017, examines the role that account aggregation technology could play in the wealth management industry.

Wealth management firms are “perfectly placed” to exploit automated account aggregation technology in order to make advisors more efficient, an exclusive report from MyPrivateBanking finds, giving a nod to the digitisation of what some consider an outdated industry. 

The Swiss research firm's global report, Digital Account Aggregation in Wealth Management 2017, examines the role that account aggregation technology could play in the wealth management industry. It is based on in-depth interviews with executives from the banking and wealth management sectors who work in account aggregation. 

The report suggests that such aggregation systems could enhance advisors' efficiency levels by using computer-assisted data and digital platforms to harvest information and then distribute it across several networks. For example, a client's financial history could be accessed through client relationship management and financial planning systems. MyPrivateBanking argues this more streamlined approach to data management would free up advisors' time by eliminating the need for multiple data uploads and would allow them to focus more on developing client relations. 

MyPrivateBanking finds that there is an appetite for data aggregation particularly among the Millennial generation of clients, or those aged between 18 and 34. 

The report suggests that Millennials increasingly expect to have one platform where they can login to and access an overview of all their data with a single click. Their benchmark for client experience is not defined by financial service providers alone, MyPrivateBanking says, and if these expectations are not met, Millennial clients will seek a more technology-oriented banking or wealth management platform.

MyPrivateBanking recommends that wealth managers should use automated account aggregation as one element of their digital strategy to bolster their Millennial client base and build long-term client relations. The wealth management industry should see big data as an opportunity for expansion, and should positively embrace technology solutions as opposed to viewing them as a threat, the report says. 

“Digital account aggregation will be the new normal in wealth management over the next 5-10 years,” said Rosalia Engchuan, senior analyst of MyPrivateBanking and author of the report. 

She added: “The best option for wealth managers is therefore to realize this trend and take the necessary steps to become an early adopter rather than risking to be too late.”

The report's findings come as the wealth management and banking industries ready themselves for the implementation of various European Commission directives, such as PSD2, which will give rise to financial technology providers while disrupting the traditional European payments landscape. 

The Second Payment Services Directive, or PSD2, will make it easier for new market entrants to poach clients from established banks and wealth management firms, according to MyPrivateBanking. Fintech firms such as MINT and Personal Capital already offer a holistic overview of a client's wealth and provide tools for analysis. Robo-advisors Betterment and Vanguard Personal Advisors have partnered with vendors to offer account aggregation and MyPrivateBanking says it sees more cooperation between fintech firms and wealth managers in the pipeline.