What does digital transformation mean for private client services?
Cryptocurrencies promised a revolution. Their decentralised infrastructure was thought to be the future of finance – and by late 2021, they were worth $3tn. Then those values came crashing down. Now the king of crypto, Sam Bankman-Fried, has been found guilty of one of the biggest financial frauds of all time.
The collapse of Bankman-Fried’s FDX has made it clearer than ever that new investment technology brings potential risks. The constantly evolving legal landscape around these technologies is getting harder to navigate without expert support.
Do existing laws cover these new developments? Or are new regulations needed to cover unprecedented situations? For example, now that so much of our lives are online, what happens after death? How do we prevent or legislate against identity theft when it comes to social media or digital assets?
Digitisation demands a step change
The legal profession is more often associated with sealing wax and quills than keyboards and hard drives. But the pandemic has accelerated the already rapid digital revolution – lawyers and their clients are having to rethink how they navigate the complexities of wealth management. Advisers will need to tread carefully to avoid the risks of new technology while still reaping the benefits.
From a practical point of view, digitisation in the legal profession is improving efficiency and cost-effectiveness. Admin is faster. Data is more accurate. Information is quicker and easier to access. These benefits mean better decisions, better communication and more time to focus on high-value tasks.
With AI, multiple pieces of unstructured data can be aggregated. Lawyers will find it easier to retrieve information, analyse precedents, stay up-to-date with evolving regulations, as well as monitor risks and exposure.
For clients, digitisation is a welcome change. Accessing services in a digital world is a much better fit with their day-to-day lives – in which sealing wax doesn’t play a particularly large part. Suddenly it’s easier to track progress or manage portfolios. As well as being more transparent, user friendly dashboards make complex data accessible to wider numbers of people.
Online systems for applying for probate or making lasting powers of attorney should be faster and more convenient. The Law Commission’s consultation could make digital wills a reality. Digitisation is making it easier for lawyers and wealth advisers to give their clients better, faster service at better value.
Making the most of the opportunities
There are risks associated with any new technology. Privacy concerns. Cybersecurity breaches. System downtime. Lawyers need to partner with reliable and reputable technology providers and employ robust backups. Above all, firms must invest in training staff for the digital era so that they can meet the needs of clients while minimising the potential pitfalls.
Some legal professionals find digital tools challenging. However, with comprehensive training and support, lawyers can harness the full potential of digitisation in private wealth management.
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