Digital revolution in Wealth Management - Kotak Bank

With a constant increase in the number of high net-worth investors (HNIs), Indian markets have moved up the ladder of the digital wealth management world. 42% of wealth managers believe that a mix of digital and offline ways of communicating is ideal. Wealth managers should be able to adapt to the changing digital ecosystems of these HNIs who are still under-served by traditional wealth management institutions and yet keep a balance between the two schools of wealth management.

This change in requirements of the HNIs has not emerged overnight, but is a result of changing market conditions and various other factors in the economy.

  • Higher Regulations and diminishing Profitability –With the current financial conditions changing rapidly, distrust and panic situations have often been observed among the investors. Introduction of new currency and demonetization, changes in tax structure due to GST and other changes have made the investors doubt profitability and stability of investment options. Today, transparency has become a key factor to integrate technology in all transactions in the economy. Speedy adoption of these regulations have made it necessary for one to digitize their operations.

  • Changing Customer Profiles - 62% of HNIs believe that digitization of wealth management services is a positive approach. However, they would still prefer to meet their wealth manager from time to time. Understanding your client requirements to build an engaging experience is essential. Today’s investors like to constantly know and control their investments under the guidance of a wealth manager. They also expect high quality services to be maintained with ultimate secrecy. Demanding customers with less and less time to invest have positively impacted the emergence of digitalisation of wealth management hugely.

  • Erosion of Trust – Poor communication skills, lack of transparency and a high face-to-face meeting expense has cost the wealth managers the trust that investors had in their services. In order to re-establish this trust and provide transparent data, social media is being used as a strong brand building tool. With the help of social media tools, investors can obtain investment information as well as have constant dialogue with their advisors in order to create a trust environment.

  • Changing Business Models – Today's Gen Y, HNIs are well informed and prompt in their responses towards changing market trends. They make quick changes to their business models in order to tap the ever changing external environment of a company. With these changing needs emerge fast moving investment requirements. In order to meet these requirements efficiently, use of technologically advanced tools is very important.

How digitalization is changing wealth management

Today’s young tech savvy generation looks to conduct all their interactions and transactions online with the help of their smartphones. Digital presence in the investment world has changed the way investors function. It has enabled them to take riskier yet quick decisions with the help of technology. Such an efficient working culture has led to the following changes in the wealth management world:

  • Efficiency boost – Digitalization has benefited both, the wealth manager as well as the investor. It has streamlined the process of communication of investment idea between both the parties, helping the investors hold a better and more dynamic portfolio at all times. Up to date information and quick analysis tools have freed many resources from the daily tiring routine to be used elsewhere in more important activities. Regular electronic audits have reduced errors as well as helped track investments with minimum efforts, increasing transaction activities and in turn, boosting efficiency.

  • Structured Data – Digitalization of data enables one to access large amount of information relating to not only the current year but also many previous years. With wealth managers using sophisticated tools like cloud computing, social media and mobile applications, these tools help them fulfil their services faster through more number of interactions with the client yet at lower costs. Structured data also gives the investors transparency of information, where they can take intelligent investment decisions based on high end data researches.

  • Digital Quotient – In order to build an investor’s profile, wealth managers have started giving importance to understanding their client’s digital quotient. It is easy to adopt new technologies, however, what one should look into first is the rate of success of these technologies in relation to a particular HNIs investment structure. Investment strategies based on high end technological tools, which are difficult for the investors to interpret, may not yield the desired results. So, digitalization and technological know-how should be directed towards improvement as well as personalization of an investor's investment process, keeping the goal based investing concept in mind. Fascinating a client with big terms and jargons is very easy, but blending them to generate high rate of return is all the more important.

  • Information Overload – An investor seeks detailed research on their investment options from the wealth manager. Information overload can either overwhelm or confuse an investor. Customer integration with the clients, be it digital or personal, plays an important role in making the investor comfortable with his investment decision. It is very important to provide the investor with the correct information for their portfolios at the right time. Advice that best suits their investment horizon as well as risk appetite is necessary. Digital means help a wealth manager to enrich their clients, engage them and thereby help them to implement investment strategies efficiently at every step rather than only delivering content.

  • Various Roles – Digitalization has changed a wealth manager's role completely. They are no longer an investor’s main sources of information. For information, investors today rely on various websites, research papers available online or videos of company management etc. Thousands of sources provide immeasurable data across the globe within minutes. The role of wealth managers has risen from routine administrative tasks to more sophisticated advisory activities, where they are directly responsible for addressing an investor's needs and concerns.

  • Essence of Time – Time is a key factor in investment. Investing money in an rising asset at the right time can lead to phenomenal profits, while doing the same at a time not suitable for that particular asset may lead to heavy losses. So is the case with adaptation. Investors who adapt to digital tools and digitally equipped wealth managers run ahead of time, capturing each opportunity available at their nascent stages, yielding higher than expected returns. Today, with the advancement in digital technology, the wealth management industry is evolving from a channel for financial products to a channel for financial advice.


All in all, investors who are still using the old school methods of working are losing out on tapping various upcoming opportunities to optimize the risk-return profile of their portfolios. So go ahead, all you have to do is make sure you have telephone connectivity and leave the rest on digitally well equipped experts who have their best interest in your growth.

Latest Comments

Leave a Comment

200 Characters

Related Information

Read Next


What are the Next gen of HNI gearing up for?

Are you or your kids the next gen? Is your wealth management aligned with your financial needs.


Digital Tools for Wealth Maximization

It is up to the management to use the digital revolution to your benefit.


Concierges of the Digital Age

When Technology meets wealth management, its beautiful.

Load More

Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.