Capgemini has just published a World Wealth Report. The World Wealth Report (WWR) reveals that the global population of people with assets at the level of min. 1 million US dollars, i.e. the group of the so-called High Net Worth Individuals (HNWI) – increased by 7.8 percent, and their wealth by 8 percent. in 2021, thanks to a recovery stimulated by the stock market. North America continued the positive trend, boasting the highest growth in HNWI population and wealth (13.2% and 13.8% respectively). From the point of view of the overall pace of change, the slow growth of HNWI in the Asia-Pacific region ranks this dominant region in the last decade in the third place. Capgemini’s Global Wealth Report analyzes the past year’s global wealth movements, researching trends and analyzing the needs of this new type of customer.
The past year has been a time of tremendous accumulation of wealth around the world: recovering economies stimulated by stock market spikes pushed the global HNWI population and global wealth to rise. The United States played a key role here, where a strong technology sector was driving wealth results, especially in the second part of the year. On a closer look, however, the euro area also achieved another highest growth rate to date – 6.7%. in the HNWI population and 7.5 percent. in property growth. As a result, the growth rate in the Asia-Pacific region was in third place.
To capture new customer segments, companies need to rethink their engagement strategies
HNWI demographics are constantly evolving and more and more women, LGBTQ + people, Millennials and Gen Z are looking for services to support wealth management. Each of these emerging customer segments has its own values, preferences and requirements that many wealth management companies are not currently equipped to meet, causing many of these HNWIs to shift to more adaptive competitors or smaller family offices.
“Interestingly, as much as 39 percent Millennial HNWI representatives changed their financial services provider last year due to a lack of transparency. The financial partner for this group must provide a good level of digital interaction, education and convenience. In a word – a new wave of wealthy people has unique customer needs that require companies to adapt their business strategies to a new type of requirements. Our report indicates that to unlock this largely untapped customer segment, wealth management companies need to focus on providing greater convenience, personalized experiences and building trust through approaches such as ecosystem collaboration, end-to-end digital solutions and greater diversity when hiring new talent,” says Grzegorz Wołodko, director of the Software Solutions Center at Capgemini.
Wealth management companies need to harness data-driven opportunities
The wealth management sector is undergoing a diversification of investment options, from sustaibable investing (SI) to the increasing diffusion of digital assets. But that’s not all.
“As the importance of ESG continues to grow, wealth management companies must strive to ensure that educational support and a wide range of products for HNWI people are key pillars in their strategy for developing this segment. According to the report, around the world, 55 percent. people from the HNWI group said that investing in cases with a positive ESG impact is of key importance for them, and 64 percent. of them, when interviewing a potential financial partner, asked for an ESG assessment to gain awareness of the fund’s impact on society. However, 40 percent. wealth managers have difficulty showing the impact of ESG. This is a big lesson for companies to do,” adds Grzegorz Wołodko, director of the Software Solutions Center at Capgemini.
To meet the challenges, more and more wealth management companies are establishing a new role in the organization’s structures – the Chief Customer Officer (CCO). The role of the people in this position is to nurture the relationship with the client and place him at the center of the wealth management process. This role focuses on organizing both data and digital benefits across the organization to meet changing and complex customer demands and increase customer loyalty.
The report shows that by prioritizing automation and data-driven analytics, wealth managers can provide a hyper-personalized experience to meet the expectations of new – young and diverse customers. CCOs will play an integral role in building such integrated ecosystems while empowering their advisors through practical data analysis. In this way, companies can work to adopt a one-stop-shop approach to comfortably meet all customer needs, taking into account unique lifestyle and preferences, ultimately drive owing to the development of the company.
