Less than a quarter of wealth management businesses view their digital offerings are good enough for clients amid the coronavirus pandemic.

Consultancy Alpha FMC’s Wealth Management Digital Readiness Survey found just 23% of firms think their online services meet client expectations.

It suggested ‘confusion or a lack of clarity around the responsibility for digital in a firm’ might have contributed to this, with only 8% of firms having a dedicated chief digital officer and 61% of firms indicating this area was owned by a technology & change division.

The study, which drew responses from executives at 13 small to large firms in the EMEA region managing over £1 trillion in combined assets under management, also revealed a significant increase in focus on digitisation.

Three quarters of companies now consider digitisation as a top priority – up from 64% in 2019 – while 38% expect to increase their spend on their digital offering, up from 27% last year.

Alpha FMC head of wealth Kenn Taylor said: ‘It is clear that firms have had to react fast to the increased remote client servicing forced on them by the Covid-19 pandemic, and it is to their credit that they have managed to step up so quickly.

‘However, our research reveals that, despite the priority that firms put on improving the customer experience, there is a long way to go. It is clear there are fundamental building blocks which need to be tackled by wealth managers if they are to make better progress to close the gap on their client’s expectations.’

The biggest motivation for digitisation was seen as reducing service costs, with 64% of respondents citing as a key driver. This was followed by client expectations, which accounts for 58% of responses, and the need to scale – cited by 54%.

A lack of a single source of data was noted as a barrier to progress by 81% of firms, with 66% saying they rely too much on Excel and email for data processing.

Taylor continued: ‘The digital focus for firms continues to be the frequent client touchpoints of client reporting, annual reviews and servicing, but they have also worked out that there are significant cost benefits in digital automation, although this is largely front office orientated at present.

He added: ‘Firms have long struggled with their legacy technology estates and we see most of the leading wealth managers making progress with large investments to address the issue.

‘However, tackling the uncontrolled use of Excel and getting better discipline into their data mastery and governance will enable the industry to make further progress to close the yawning gap between their own capabilities and their clients’ needs.’