Wealth management trends for 2016 indicate a growing demand for credit among high net worth individuals (HNWIs), leading firms to develop lending solutions and improve efficiencies through utility-based models. There's also a significant rise in cyber threats emphasizing the need for enhanced security, alongside a shift toward digital services and automated advisors driven by changing client preferences. Furthermore, wealth managers are increasingly focusing on client engagement through predictive analytics and personalized wealth-planning tools to address the evolving expectations of HNWIs.

1. Wealth Management Trends for 2016

2. 2Copyright © Capgemini 2013. All Rights Reserved
Presentation Title | Date | Financial Services
Cross-sell opportunities
Holistic financial planning
services
Wealth Management firms are building lending
solutions to cater to the strong HNWI demand
for credit and to enhance performance
17.8%
28.6%
Use of credit highest in
the emerging markets of
Latin America
Percentage of HNWIs’
(global) total personal
assets financed by
credit
25.5%
Followed by Asia-Pacific
(excl. Japan)
Source: Capgemini Financial Services Analysis, 2015; Capgemini and RBC Wealth Management Global HNW Insights Survey, 2015

3. 3Copyright © Capgemini 2013. All Rights Reserved
Presentation Title | Date | Financial Services
Improved efficiencies
Reduced operational costs and
risks
Firms are increasingly adopting utility-based
models for their middle- and back-office
functions
Focus on value-added services
Utility model leverages
standardization, outsourcing, and
economies of scale
Source: Capgemini Financial Services Analysis, 2015; Next generation private banking operating models, Hubbis, August 2015

4. 4Copyright © Capgemini 2013. All Rights Reserved
Presentation Title | Date | Financial Services
Proliferation of digital
channels
increasing number of data theft
instances
Cyber threats are increasing at a faster rate,
resulting in rise in focus on cyber security by
wealth management firms
Protection of brand reputation
15.0%
RIAs reported being
victims of a cyber
security breach in the
past 18 months
$3.8
million
Average cost of data
breach incident
increased by 23% from
2013 levels
Source: Capgemini Financial Services Analysis, 2015; Firm cyber security breaches on the rise, WealthManagement.com, June 2015; “High-tech attacks, High cost: Data breaches cost average of $3.8 million each”,
CNBC, May 2015

5. 5Copyright © Capgemini 2013. All Rights Reserved
Presentation Title | Date | Financial Services
Significant cost benefit
Scale down/up infrastructure as
necessary
Cloud computing is transforming the IT
landscape of the wealth management industry
Minimize waiting period for application
deployment
Offers better access to
information from any geographical
location, further improving client-
wealth manager relations
Source: Capgemini Financial Services Analysis, 2015

6. 6Copyright © Capgemini 2013. All Rights Reserved
Presentation Title | Date | Financial Services
Advances in technology
Client demand for digital services
Wave of digital revolution is transforming the
industry with the rise of new entrants and
technological innovations
Increase in regulations
80.0%
of under-40 HNWIs indicated they would
leave their wealth management firm if it
fails to provide a integrated-channel
experience
Source: Capgemini Financial Services Analysis, 2015; World Wealth Report 2014, Capgemini and RBC Wealth Management

7. 7Copyright © Capgemini 2013. All Rights Reserved
Presentation Title | Date | Financial Services
Social Responsible Investing
Impact Investing
HNWIs are looking forward for support from
their wealth managers in driving social impact,
as they desire to contribute to the society
Traditional Philanthropy/Donations
92.0%
of the HNWIs ascribe some level of
importance to driving social impact and
it is extremely or very important to over
60.0% of HNWIs globally
Source: Capgemini Financial Services Analysis, 2015; Capgemini and RBC Wealth Management Global HNW Insights Survey, 2014; Impact investing on the cusp of mainstream wealth management, Investment News,
June 2014

8. 8Copyright © Capgemini 2013. All Rights Reserved
Presentation Title | Date | Financial Services
Desire to interact digitally
with firms
Lower costs and lower
thresholds
Converging demographic, technological
trends, and changing HNWI demands are
driving the adoption of automated-advisors
Offloading of basic back-office tasks
US$3.3 –
4.2 trillion
48.6%
HNWIs saying they would
consider using automated
advisors for a portion of their
portfolio
U.S. market potential, with both
HNWIs and mass-affluent
individuals taken into account
48.3%
Of these, HNWIs considering
lower costs and higher
convenience as the primary
reasons
Source: Capgemini Financial Services Analysis, 2015; Capgemini and RBC Wealth Management Global HNW Insights Survey, 2015

9. 9Copyright © Capgemini 2013. All Rights Reserved
Presentation Title | Date | Financial Services
Optimize channel
management
Customer retention and
acquisition
Firms are increasingly using predictive
analytics to process vast amounts of
structured and unstructured data
Cross- and up-selling opportunities
Produces actionable information that
enables firms to better understand their
clients and enhance client experience
and loyalty
Source: Capgemini Financial Services Analysis, 2015; World Wealth Report 2015, Capgemini and RBC Wealth Management

10. 10Copyright © Capgemini 2013. All Rights Reserved
Presentation Title | Date | Financial Services
Divesting/exiting business
from non-strategic markets
Regulatory capital requirements
Business opportunities coupled with the need
for operational restructuring, is pushing firms
to focus on their priority markets
Increase in HNWI populations in emerging
markets
Primary objective is to achieve
sustainable growth in priority markets
and maintain profitability
Source: Capgemini Financial Services Analysis, 2015

11. 11Copyright © Capgemini 2013. All Rights Reserved
Presentation Title | Date | Financial Services
Changing expectations and
behavioral patterns
Automation of low-value back-
office tasks
Firms are investing in financial planning and
advice tools, to empower wealth mangers to
offer personalized recommendations to HNWIs
Cost-efficient and technologically advanced
operating models
80.5% of wealth managers consider
wealth-planning tools to be the most
important of the capabilities needed to
meet changing client needs
Source: Capgemini Financial Services Analysis, 2015; World Wealth Report 2015, Capgemini and RBC Wealth Management ; Improving financial advisor productivity through automation, Capgemini, 2011

12. The information contained in this presentation is proprietary.
© 2015 Capgemini. All rights reserved.
www.capgemini.com
About Capgemini
Now with 180,000 people in over 40 countries, Capgemini is one
of the world's foremost providers of consulting, technology and
outsourcing services. The Group reported 2014 global revenues
of EUR 10.573 billion.
Together with its clients, Capgemini creates and delivers
business and technology solutions that fit their needs and drive
the results they want. A deeply multicultural organization,
Capgemini has developed its own way of working, the
Collaborative Business ExperienceTM, and draws on
Rightshore®, its worldwide delivery model.
About Capgemini
Now with 180,000 people in over 40 countries, Capgemini is one
of the world's foremost providers of consulting, technology and
outsourcing services. The Group reported 2014 global revenues
of EUR 10.573 billion.
Together with its clients, Capgemini creates and delivers
business and technology solutions that fit their needs and drive
the results they want. A deeply multicultural organization,
Capgemini has developed its own way of working, the
Collaborative Business ExperienceTM, and draws on
Rightshore®, its worldwide delivery model.