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Lack of digital skills worry CEOs as tech disrupts wealth businesses

Lack of digital skills worry CEOs as tech disrupts wealth businesses

Regulation, technology and changing consumer behaviour are three main worries for wealth and asset management CEOs, according to a report by PwC.

Although assets under management (AUM) globally will have almost doubled by 2025, rising from £61.2 trillion in 2016 to £104.8 trillion, the report said, CEOs are aware major changes to fees, products, distribution, regulation, technology and people skills are looming.

According to the report, regulation is their biggest worry, with 83% of CEOs stating that they’re ‘somewhat or extremely concerned’ by it.

While 70% of the CEOs surveyed also believe that changes in core technologies will prove ‘disruptive or very disruptive’ over the next five years.

As a consequence, many are also worried about the availability of digital talent, with 63% confessing to being ‘somewhat or extremely concerned’ about the lack of digital skills in senior leadership, and 67% being concerned about a lack of digital skills throughout their businesses.

But, the report added, wealth and asset management bosses are struggling to come to grips with how technology is changing consumer behaviour, with just 38% of the interviewed CEOs believing that robotics and alternative intelligence can improve the consumer experience.

Despite the concerns, over three quarters of CEOs said they are gearing up for organic growth in the year ahead, with 57% saying they plan to increase headcount to prepare for growth.

But with fees under pressure particularly in the US and Europe, 39% of CEOs said they intend to cut costs.

Elizabeth Stone, UK asset and wealth management leader at PwC, said: ‘Artificial intelligence, robotics, big data and blockchain are all transforming the way asset and wealth managers work.

‘Some firms are further ahead than others in exploring these, but all firms needs to ensure technology is front and centre of their business models, especially as barriers to global business are likely to continue to rise.

‘It’s also important not to forget the uniquely important role of human talent in this industry. Finding and retaining the best people remains a key differentiator in a competitive market.’

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