The Capgemini annual report on global wealth trends focused some of its attention on firms' and advisors' views on digital technology, and the value this has for them.

The vast majority of wealth managers polled by Capgemini in this week’s annual survey of global wealth trends realise digital technology can bring them closer to clients but many want better tools.

Capgemini said that more than 80 per cent of the wealth managers it spoke to said digital channels can improve how they interact with clients, but less than half (45.4 per cent) were content with the capabilities provided to them. In particular, social media channels come up short, they said.

The consultancy and research firm, which has produced the annual report for 20 years, has introduced a new measure, called the DigiWealth Maturity Assessment Model, which seeks to work out how far advanced firms are in bringing out new technologies. Global high net worth individual demand for automated advisory services, so-called “robo advisors”, has risen to 66.9 per cent this year, from 48.6 per cent in 2015, Capgemini said. In Asia, the demand level for robos is even higher, at 79.6 per cent for Asia ex-Japan.

“Digital capability is crucial to maintaining and growing profits, but very few firms have built differentiated digital maturity into their business. We estimate firms offering sub-optimal digital experiences could put as much as 56 per cent net income at risk, due to client attrition,” the report warned.

The industry is only at a "medium level" of digital maturity; firms are weakest in providing digital capabilities to clients and wealth managers, scoring three on a five-point scale; if third-party analyst views are taken into account, the score is likely to be lower, the report said.

The wealth management industry, along with financial services more broadly, is being shaken up by developments such as “robo advisors”, big data, artificial intelligence, use of mobile platforms such as tablets, two-way video conferencing and messaging, biometric verification, and blockchain distributed ledger systems. A number of banks, such as Standard Chartered and Deutsche, have formed innovation “labs”, while others have teamed up with business schools and universities to power new ideas. 

In April this year, a report by Accenture found that the amount of investment dollars channelled into the global fintech sector shot up 75 per cent to $22.3 billion last year. In Asia-Pacific, investments more than quadrupled to $4.3 billion, with the lion’s share occurring in China ($1.97 billion) and India ($1.65 billion). In Europe, it more than doubled (120 per cent), while the number of deals rose by 51 per cent and investments in German ventures alone swelled 843 per cent. Investments in the North American fintech sector (the world's largest) grew more modestly, by 44 per cent to $14.8 billion; the US continued to dominate the sector with 667 fintech deals - a 16 per cent increase.

Wealth managers in Capgemini's study said digital tools were useful for a variety of tasks, such as helping to work with clients (85.9 per cent), greater use of client data to hunt for growth opportunities (82.1 per cent) and scrapping paperwork (82.1 per cent). The benefits of using digital tech are also stronger in the eyes of younger managers, the report said.

To view a report on the main findings of the report, see this story here.