Global leaders in wealth and investment management are worried that advancing technology will dent growth and negatively reshape competition over the next five years.
The sector is displaying a reluctance to adopt new technology, with barely 10% of CEOs saying they were prioritizing the improvement of digital skills and capabilities, according to a recent survey by business advisory firm PwC.
“Confidence is high, but the sector is showing signs of being slow to innovate and adapt – particularly to technology and a changing customer base,” said Mark Pugh, UK asset and wealth management leader, at PwC.
The rapid technological change is among the four major factors causing concern for CEOs, the others being cyber threats, changing customer behaviors, and a lack of skilled talent.
Surprisingly, they are reluctant to use technology as a means to mitigate the worry. In the survey, just 27% of CEOs said they want to collaborate with start-ups.
“This confirms the sector’s reluctance to innovate and tap into an area known for its agility and highly sought skill sets,” says PwC.
Many CEOs argued that technology has had less of a transformative impact on their sector than other financial services areas in the past 20 years.
“Their muted responses to issues on technology show some firms are planning on continuing business as usual,” said Pugh, warning that those refusing to adopt technology may find themselves “swept aside” by the firms that do.
A majority of CEOs in this sector consider the United States the most important market, with many of them regarding New York City as the key financial center.