In the private banking and wealth management industry, the focus and activity is shifting towards improved client service and delivering real added value. New competitors are challenging the dominance of established firms, and the impact of new regulations and more demanding client expectations are forcing private banks and wealth managers to change the way they operate. Those who can master change will be in a position to lead the industry and we believe that clear industry leaders and losers will emerge by the middle of this decade.
Private banks and wealth managers are facing increased pressures on costs, tougher regulatory demands and the requirement for greater transparency. The industry has historically underinvested in the back and middle office, and businesses are at different stages of their operational evolution. Many continue to run legacy systems and manual processes. Technology budgets are being directed to better support client relationship managers and the front-end client experience.
The shortage of talent is one of the biggest barriers to future growth. Top quality people are becoming more valuable, more difficult to source and more expensive to train. Links between performance and pay are becoming critical. New strategies, incentives and support are needed to attract and retain qualified professionals.
Wealth management continues to be a lucrative business with untapped potential for significant growth if institutions can be agile in adapting to meet changing demands.
We work with a variety of clients in the industry to help them accelerate and embed sustainable businesses. As market leaders, we constantly pioneer to give our clients an intelligent, imaginative and resourceful service. As part of PwC's international network of private banking and wealth management experts, we are well placed to help our clients as they address increasingly international challenges.
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