Digital Disruption in Wealth Management

1. Digital Disruption in Wealth Management
​David P. Wilson
​Global Sales and Marketing / Head of Strategic Analysis Group
​Capgemini

2. Agenda
A (Very) Quick Introduction
How Much Millionaire Wealth Exists in the World?
What Forms of Disruption Impact the Wealth Industry?
What does “Digital Disruption” Look Like?
How Can Firms Move Forward?
Q&A

3. For 18 years, the WWR has been the benchmark
Changing
HNWI
Behaviors
Offshore vs.
Onshore Capital
Flows
Change and
Innovation in
Private
Banking Ultra-HNWIs
Specialized
Products and
Strategies
Europe vs.
North America
HNWIs
Impact of New
Market
Realities on
HNWIs
Institution-
Like HNWI
Behaviors
Mid-Tier
Millionaire
Challenge
Globalization
and Wealth
Transfer
Needs-Based
Client
Service Models
Meeting Needs
of Growth
Markets
Adapting to
New Market
Realities
Change in
Investor Psyche
post Crisis
Leveraging
Enterprise
Value
Developing
Scalable Business
Models
Regulatory
Impacts on WM Firms
and their Clients
Digital Opportunities
for Wealth
Management Firms

4. Global HNWI wealth up 13.8% in 2013
* Forecast
Source: Capgemini Financial Services Analysis, 2015
www.WorldWealthReport.com
CAGR
2013–2016F
Europe
North America
Asia-Pacific
Latin America
Middle East
Africa
Global
6.4%
9.8%
7.1%
2.3%
6.0%
6.6%
6.9%
Wealth expected to pass $64 Trillion by 2016
HNWI Investable Wealth Forecast by Region
7.37 9.65 10.82 10.71 12.02 14.20
18.80
9.06
10.67 11.64 11.37
12.70
14.88
17.90
8.32
9.50
10.19 10.07
10.90
12.39
15.20
5.79
6.66
7.27 7.07
7.54
7.70
8.20
1.40
1.47
1.65 1.67
1.81
2.11
2.60
0.84
1.01
1.15 1.12
1.25
1.34
1.6
0
15
30
45
60
75
2008 2009 2010 2011 2012 2013 2016F*
HNWIInvestableWealth
Total 32.77
Total 38.96
Total 42.73
Total 42.00
Total 46.22
Total 52.62
6.9%
Annualized
Growth
Total 64.3
1.60

5. Clusters of HNWI population and wealth growth
HNWI Population vs. HNWI Wealth Growth Across Key Markets, 2008–2013
Note: Size of the bubble represents HNWI wealth in 2013; Hong Kong has not been placed to scale on the graph as it is an outlier
Source: Capgemini Financial Services Analysis, 2015
www.WorldWealthReport.com
United States
Japan
Germany
Brazil
China
UK
France
Mexico
Australia
Austria Russia
Argentina
Switzerland
India
South Korea
Singapore
Saudi Arabia
Spain
Netherlands
Italy
Taiwan
Kuwait
Canada
Norway
0%
4%
8%
12%
16%
20%
0% 4% 8% 12% 16% 20%
HNWIPopulation2008–2013CAGR
HNWI Wealth 2008–2013 CAGR
GlobalAverage
(9.9%)
Global Average (9.9%)
= US$1Trillion
Sample bubble
Hong Kong
28.2% Wealth
27.3% Pop.
Average growth
Below-average
growth
Above-average
growth

6. Wealth industry faces most disruption since the crisis
Key Drivers of Disruption in the Wealth Management Industry
Source: Capgemini Financial Services Analysis, 2015
Shifting Client Demographics Increasing Regulatory Pressure
Changes in HNW Client Behavior
Advances in Technology Demand
and Capability
www.WorldWealthReport.com

7. Four fundamental digital tailwinds
Disruptive Digital Forces on Wealth Management Industry
Source: Capgemini Financial Services Analysis, 2015
www.WorldWealthReport.com

8. Why has the industry not moved forward?
Digital Myths in Wealth Management
Source: Capgemini Financial Services Analysis, 2015
“HNWIs do not
want digital tools,
just F2F”
“Digital channels
will cannibalize our
business”
“Advisors will
not use digital
tools”
“True integrated
channel capability is
too difficult”
“It is a low priority
compared to other
issues”
www.WorldWealthReport.com

9. Strong HNWI demand for digital in the relationship
HNWIs Who Expect Entire or Most of Future Relationship With Wealth Management Firm To Be
Digital, By Age (%)
Source: Capgemini Financial Services Analysis, 2015; Capgemini, RBC Wealth Management, and Scorpio Partnership Global HNW Insights Survey, 2014
www.WorldWealthReport.com
87%
83% 81%82%
76%
66%
75%
53% 50%
82%
50%
40%
0%
25%
50%
75%
100%
Asia-Pacific (excl. Japan) Japan RoW
Respondents(%)
Under 40 Age 40-49 Age 50-59 Age 60+

10. 65% of HNWIs at risk of leaving firm for lack of
integrated channel experience
HNWI Propensity to Leave Wealth Management Firm Due to Lack
of Integrated Channel Experience (% of Respondents)
Source: Capgemini Financial Services Analysis, 2015; Capgemini, RBC Wealth Management, and Scorpio Partnership Global HNW Insights Survey, 2014
www.WorldWealthReport.com
63%
70%
68%
65%
0% 20% 40% 60% 80%
$20m+
$10m–$20m
$5m–$10m
$1m–$5m
56%
63%
63%
76%
83%
87%
65%
0% 20% 40% 60% 80% 100%
North America
Europe
Japan
Middle East and Africa
Asia-Pacific (excl. Japan)
Latin America
Global
49%
60%
68%
80%
0% 20% 40% 60% 80% 100%
Age 60+
Age 50–59
Age 40–49
Under 40

11. Under 40s have highest digital demands
Under 40
40+
HNWI Channel Importance for Different Wealth Management Capability Areas
Note: Weighted average of respondents indicating importance level to difference capabilities per channel
Source: Capgemini Financial Services Analysis, 2015; Capgemini, RBC Wealth Management, and Scorpio Partnership Global HNW Insights Survey, 2014
INFORM ENGAGE
TRANSACT
www.WorldWealthReport.com
54%
49%
65%61%
54%
45% 48%
22%
34%
12%
35%
14%
0%
20%
40%
60%
80%
Respondents(%)
52%51%
57%
53% 55%
52%
46%
25%
40%
19%
43%
20%
0%
20%
40%
60%
80%
Respondents(%)
59%
58% 58%
45%
58%56%
46%
26%
36%
20%
41%
24%
0%
20%
40%
60%
80%
Respondents(%)
In-Person/
Phone
Internet E-mail Mobile Social
Media
Video In-Person/
Phone
Internet E-mail Mobile Social
Media
Video
In-Person/
Phone
Internet E-mail Mobile Social
Media
Video

12. Source: Capgemini Financial Services Analysis, 2015
Overview of Social Media in Wealth Management
DEMAND EXISTS…
… BUT FIRMS
OVERWHELMED BY
CHALLENGES…
… THOUGH
SOLUTIONS EXIST
Social media is at a nascent stage in wealth mgmt
www.WorldWealthReport.com

13. Future leaders will view digital as essential to
providing a seamless client experience
High-Level Digital Prioritization Roadmap in Wealth Management
Source: Capgemini Financial Services Analysis, 2015
Core/Strategic Focus Transformation Focus
Shift the business mindset
Develop ROI model / cross-enterprise
support
Make build vs. buy decisions
Implement quick wins
to build momentum
Develop big data opportunities
www.WorldWealthReport.com