European wealth managers are set to increase their spending on technology in a bid to better understand investors’ behaviour.
A study conducted by behavioural finance firm Oxford Risk found that 79% of respondents believe improved technology enables them to gain insight into their clients’ “financial personality”.
Furthermore, 80% believe these insights will give them a competitive advantage and the ability to win more business.
However, the study, which canvassed wealth managers in the UK, France, Italy, Spain and Ireland with a collective €327 billion of assets under management, also revealed that close to half (49%) still rely mainly on their own intuition to assess their clients’ psychology. In comparison, 57% believe they have a “very good understanding” of investors’ behavioural tendencies.
“Technology and digitalisation have accelerated across all sectors and industries, and to some extent, it can be argued that wealth managers have been slow to catch up,” said Greg Davies, head of behavioural finance, Oxford Risk.
“However, the research indicates that they are starting to wake up to the benefits of rapidly expanding investments in technology for assessing clients’ behavioural needs, with most convinced that they have a large part to play in the future.”