Wealth Management Platform: Enhancing the product portfolio - Banking blog

WM platform 3 final

The first and second post of this series have explored how changes in the marketplace and client expectations necessitate a shift to different wealth management platforms. We will now assess the changes driven by emerging products.

Access to a larger product universe

To provide access to new markets and to deliver value to clients, wealth managers have expanded their product and services universe – holistic advice, ESG, crypto, tokenization and access to private markets are important examples. Clients and advisors need to navigate this universe. We will discuss how platforms can enable these trends.

ESG – Opportunity and Complexity

In the past, ESG investment was mainly concerned with avoiding certain “undesirable” industries such as weapons or tobacco. It has moved on to supporting more specific objectives, such as the UN Sustainable Development Goals. The “greenium” (a premium paid for “green” instruments in the market) creates incentives for “greenwashing”, the selling of conventional investments as ESG-aligned. Investors want to know the impact of their investment.

For wealth management systems, these expectations first pose a challenge in terms of product selection and portfolio construction. Portfolio optimization subject to ESG score is a common approach in the industry. But the identification of products in a multi-dimensional product universe beyond the traditional mean-variance optimization is a new capability requiring both conceptual and technical implementation work.

Furthermore, feedback on outcomes of ESG investment is crucial. While at the moment this reporting largely is a manual process (if it happens at all), automation can free up time of advisors and ensure clients are updated on outcomes.

In the meantime, professional investors move on from ESG as a primarily responsibility driven investment approach and recognize climate impact as a material risk driver for businesses. There is an indication that transition and physical risk start impacting valuations and have real impact on investment performance. Some platforms start integrating fundamentals such as greenhouse gas (GHG) intensity, ESG scores and net zero alignment of firms as indicators of transition risk. Platforms need to provide the ability to take decisions aligned with the expectations of investors on the impact and priority of such factors and in alignment with individual investment horizons.

Crypto and Tokenization Support

A key promise of crypto assets, the immediate execution between users, has proven problematic both from a security and from an operational perspective. Therefore, custody and execution capabilities through intermediaries increasingly become important. Risk management capabilities have to be in line with the volatility and trading behaviour of these asset classes. Smart contracts add additional operational complexity.

Tokenization will make it easier to add uncorrelated asset classes such as fine arts to portfolios, where individual objects are too expensive to include them into typical portfolios with sufficient diversification. Along the same lines, investors can get access to big ticket items by splitting the investment via a token plus have product documentation embedded in the token itself.

However, this does not necessarily address the general illiquidity (due to no or limited secondary market) and high transaction cost of these asset classes. In terms of platforms, higher transaction cost for suitability testing and risk management capabilities need to be accounted for and considered.

The implications of holistic advice

To widen the value proposition to clients, wealth managers provide more holistic advice and planning of the financial life of their clients, including managing risks. This includes instruments such as insurance which are not traditionally delivered through a banking industry channel.

This first means that the risks covered by insurances need to be integrated in a holistic financial framework. Second, it requires decisions how to integrate these products operationally and in terms of IT infrastructure. Implications can reach from a very shallow integration in terms of client targeting to an integration in the customer advice process and downstream processing. Platforms need to provide intelligent and flexible solutions which can evolve with changing business models.

Navigating the long product tail

Wealth managers have expanded the product universe – in search for yield and to support the broader financial needs of their clients. It is critical to match products with client needs to enable targeted and client-adequate marketing and sales. At the same time, banks are highly aware of regulatory requirements to ensure client appropriateness and to avoid mis-selling.

Banks have enhanced their portfolio of marketing tools by AI, promising to be better able to detect buying patterns and to identify target clients. Artificial Neural Networks (ANNs) have proven a tool which is particularly powerful.

At the same time, AI (as well as more traditional analytics) depends on understanding the properties of products driving client interest and suitability. Natural language processing (NLP) on prospectus data is a powerful tool for extracting a much richer product taxonomy.

Platforms will integrate AI tools for campaign management and suitability checks and will interact with NLP tools to build a rich inventory.


Changes in the marketplace, client expectations and products will drive platform transformation requirements. However, it is easier to specify these new capabilities than to implement transformation in the system landscape. Stay tuned for our last blog in this series, where we will look at the options of how successful organizations structure their change programmes.

Further reading:

Taking the pulse of digital assets in financial services across EMEA | Deloitte Switzerland


Sergio Cruz

Sergio Cruz - Partner, Consulting

Sergio is the lead Partner of Deloitte’s Business Operations practice in Zurich and has more than 25 year of experience in Consulting. He focuses on large scale front-to-back digitalisation programs in financial services and has worked on several large assignments both in Switzerland and abroad, covering the implementation of regulatory requirements and the definition as well as implementation of target operating models and process optimisations.

Email | LinkedIn

Dominik blog

Dominik Ouschan - Director, Financial Services

Dominik is a Director in Deloitte’s Consulting Business Operations team in Zurich and has more than 10 years of experience in consulting. Dominik’s main area of expertise are target operating models related to the client lifecycle management. He is the lead for Deloitte’s Industry Solutions offering, focusing on front-to-back platform replacements. His expertise also includes the IT stack enabling an efficient and effective support of the front-to-back business processes.

Email  | LinkedIn


Thomas Obitz, Deloitte Associate, Guest Author

Thomas is an expert in target operating model and business architecture in the banking industry, especially in investment banking, risk and regulatory driven change. He has more than 20 years of consulting experience. Focussing on risk transformation, he combines quantitative, regulatory and procedural risk knowledge with large-scale business and IT transformation experience. He led teams and oversaw change processes in global organizations. Thomas has published on risk change and market risk (FRTB) and is a regular speaker at conferences and trainings.



Thomas Wangler, Senior Manager, Financial Services Transformation

Thomas is a Senior Manager with 13 years of experience in the Financial Services Industry, working in the Business Operations Service Offering of Deloitte Consulting AG leading the Industry Solution for Core-Banking Systems. He has profound experience in the field of technological banking transformation as well as target operating model design and implementation with his main focus being around Core Banking Systems - Program Management, Requirements Engineering, Release and Change Management, Testing.



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