Global Wealth Report 2018

Global Wealth 2018

Seizing the Analytics Advantage

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Global Wealth 2018

SEIZING THE ANALYTICS ADVANTAGE

ANNA ZAKRZEWSKI BRENT BEARDSLEY DANIEL KESSLER MARTIN MENDE FEDERICO MUXI MATTHIAS NAUMANN J?RGEN ROGG TJUN TANG TYLER WOULFE ANDR? XAVIER

June 2018 | The Boston Consulting Group

CONTENTS

3 INTRODUCTION 5 GLOBAL WEALTH MARKETS: A YEAR OF STRONG GROWTH

Key Aspects Pools of Opportunity Highlights by Region The Offshore Perspective 1 4 BRIDGING THE REVENUE GAP Winners Focus on Revenues, Not Costs Smart Pricing Is a Key Driver of Revenue Uplift Client Satisfaction Directly Drives Revenue New Revenue Streams Are There for Banks Willing to Explore Them 2 0 UNLEASHING THE VALUE OF ADVANCED ANALYTICS What Is Holding Wealth Managers Back? Accelerating Top-Line Growth Building Efficiency That Drives Margin Expansion Unlocking the Value of Data How to Get Started 3 0 FOR FURTHER READING 3 1 NOTE TO THE READER

2 | Seizing the Analytics Advantage

INTRODUCTION

The overall growth of global personal wealth continued its momentum in 2017. Residents of North America held over 40% of global personal wealth, followed by residents of Western Europe with 22%. The strongest region of growth was Asia, which posted a 19% increase. All wealth segments grew robustly, but high growth rates were especially prevalent in the uppermost wealth segments.

This report, which is The Boston Consulting Group's eighteenth annual analysis of the global wealth-management industry, includes two topics that we reexamine each year--global market-sizing and wealth manager benchmarking--as well as a special chapter on the rise of data and advanced analytics.

The market-sizing review encompasses 97 countries that collectively account for over 98% of the world's gross domestic product (GDP). It outlines the evolution of personal wealth from global and regional perspectives--including viewpoints on different client segments and offshore centers--and examines the large pools of opportunity that await forward-thinking wealth managers.

The benchmarking study focuses on why so many wealth managers struggle to maintain their top-line margins despite strong growth in personal financial wealth and assets under management (AuM). The best practices of top-performing players offer many answers and potential solutions. The benchmarking stems from a survey of more than 150 wealth managers and involves more than 1,500 performance indicators related to growth, financial performance, operating models, sales excellence, employee efficiency, client segments, products, and trends in different markets and client domiciles. It also scrutinizes smart pricing practices and looks at ways to enhance client satisfaction.

Our discussion of advanced analytics and data addresses the various challenges--and opportunities--involved in using the wide spectrum of tools now available to wealth managers for creating personalized customer experiences that reflect the clients' individual needs, preferences, contexts, and behaviors. Leveraging technical capabilities in these areas to the fullest has become critical to the success of any wealth management enterprise. In our view, wealth managers should embrace the opportunity to embark on the advanced analytics journey and to capture the considerable value it offers.

In preparing this report, we used traditional segment nomenclature that most wealth management institutions will recognize: retail, affluent, lower high net worth (HNW), upper HNW, and ultra-high net

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