Investing in Technology to lead the industry: Canada edition

Investing in Technology to lead the industry: Canada edition

The Canadian wealth management industry is experiencing rapid shifts driven by technological advancements, heightened competition from fintech, and changing client expectations. Industry research indicates that nearly 70% of Canadian wealth management executives see a rising competitive threat from fintech challengers, which has accelerated their focus on digital transformation. In response, eight in 10 believe they are agile enough to respond quickly to these market pressures, but they still face hurdles, particularly in scaling modernization projects efficiently.

Modernizing Technology and Boosting Budgets

To remain competitive, many Canadian wealth management firms are prioritizing modernization as the leading driver of IT investments—especially for cloud migration, API integration, and low-code/no-code tools. Canadian executives plan to expand IT budgets by 5.4% annually, with almost 40% allocated toward client-facing, front-office capabilities such as onboarding, advisor/client portals and CRM. Portfolio management and investment research functionalities consume an additional 27% of budgets, reflecting a robust investment in front-office tools that enhance advisor productivity and deepen client engagement.

Among top strategic projects, client acquisition and onboarding have been pivotal, with Canadian executives indicating that onboarding remains a top IT priority for nearly 40% of them. Despite years of investment, the quest for a streamlined onboarding experience remains challenging, as firms balance the needs of high-net-worth (HNW) clients with efforts to scale personalization in affluent segments. Wealth managers are increasingly leveraging AI-driven enhancements, especially for onboarding and client-facing processes, to improve productivity and build competitive advantage.

Core and Emerging Priorities

Data privacy and advisor productivity are actual core priorities, underscoring the importance of both trust and efficiency.

Data privacy is a pressing concern for nearly 90% of Canadian executives, who are tapping into AI and machine learning (ML) technologies to strengthen data access controls, ensure regulatory compliance, and detect potential anomalies. Furthermore, there’s a growing focus on leveraging technology to automate routine tasks, enabling wealth managers to free up advisors from administrative burdens, allowing them to focus on high-value activities like personalized client engagement and strategic financial planning. This streamlined approach across onboarding, CRM, and financial planning can not only enhance advisors’ productivity but also create more opportunities for meaningful client interactions.

Artificial intelligence continues to reshape the Canadian wealth management landscape, with onboarding as a primary area of AI investment for 30% of Canadian wealth managers. AI tools such as natural language processing (NLP), machine learning, and robotic process automation (RPA) can be applied to automate onboarding, accelerate insights, and tailor client interactions. While the adoption of AI for employee-facing use cases is expected to increase, reflecting broader trends towards workforce productivity and client servicing enhancements, generative AI adoption hurdles persist, including security concerns and issues around AI maturity and reliability, with Canadian wealth managers citing security, risk management, and challenges in establishing a strong business case as the main obstacles to widespread GenAI adoption.

SaaS and cloud solutions are becoming increasingly vital as wealth managers prioritize flexible, scalable, and cost-efficient technology infrastructures. Front-office functions, especially those related to client engagement, are seeing the most significant SaaS and cloud transitions, with onboarding, advisor/client portals, and planning functionalities leading the shift. SaaS adoption is becoming a standard across these functions as wealth managers tap into WealthTech solutions that support rapid, customized deployment.

Looking Ahead

Canadian wealth managers see emerging trends on the horizon, such as the democratization of wealth management and the delivery of omnichannel advice. These priorities reflect a shift toward more accessible wealth management services that cater to mass affluent segments while ensuring a consistent, seamless experience across digital and in-person channels. The integration of omnichannel advice aligns with growing expectations for a synchronized client journey that spans mobile, desktop, and traditional face-to-face interactions.

Generative AI and Wealth-as-a-Service (WaaS) stand out as potentially transformative technologies for the Canadian market in the next five years. WaaS is gaining traction as wealth management products are increasingly “unbundled” by technology providers, allowing faster, more flexible product rollouts through cloud-based infrastructures and APIs. With nearly 60% of Canadian wealth management executives identifying WaaS as a top technology by impact, firms are recognizing its ability to streamline product launches while reducing infrastructure demands.

In summary, Canadian wealth managers face a rapidly evolving environment where technology investments, particularly in AI and cloud-based solutions, are essential to remaining competitive. As firms work to modernize their infrastructures, streamline client onboarding, and enhance data privacy, they are better positioned to meet clients’ growing demands for personalized, seamless, and accessible wealth management services. The landscape is ripe for innovation, and those firms that prioritize agility, client-centric strategies, and technological resilience are most likely to thrive.