AI widens gap between scalable and struggling wealth firms, study shows

By Puja Sharma

The market is entering a new phase where innovation alone is no longer a differentiator, and AI in particular risks widening operational gaps across banking, wealth and asset management. Weak foundations, poor execution and lack of strategic sourcing models are the structural barriers preventing institutions from translating technology investment into scalable, profitable growth.

The next competitive divide in banking, wealth and asset management will not be defined by innovation alone, but by firms’ ability to scale it profitably. That is the central finding of new research that Objectway, a global wealthTech partner for banking, wealth and asset management firms, conducted in collaboration with FT Longitude, a specialist provider of thought leadership and research services.

The report, Built to Scale, is based on a survey of 300 senior professionals across banks, wealth and asset managers in the UK, continental Europe and Canada.

Altough digital transformation and AI adoption are advancing rapidly across the industry, many firms are struggling to translate investment into repeatable, profitable growth. The findings point to a market entering a new phase of competition, where scalable execution is becoming more important than innovation capacity alone.

Reflecting on this shift, Luigi Marciano, Founder and Group CEO of Objectway, commented: “For years, the industry has focused on innovation. However, our research suggests that the next competitive divide will be determined by execution. The firms achieving the strongest results are not necessarily investing more; rather, they are investing in the right sequence: strengthening operational foundations first, externalising complexity selectively and embedding AI into coherent workflows rather than layering it onto fragmented systems.”

To assess what differentiates firms that successfully translate investments into profitable growth, Objectway developed the Objectway Scalability Index, a composite framework that measures an organisation’s ability to scale profitably across two critical dimensions: client services and onboarding capabilities, and core business operations and processes.

The Index reveals a clear correlation between scalability maturity and financial performance. Among firms classified as Leaders, 18% report profitability growth above 15% in client services and onboarding, compared with just 4% of Followers. Likewise, 20% of Leaders achieve profitability increases above 15% in core business operations and processes, versus 9% of Followers.

The research suggests that competitive advantage is increasingly determined not by the scale of investment itself, but by an organisation’s ability to translate investment into repeatable operational and client outcomes. The impact is already visible. Leaders are more than twice as likely as Followers to report improvements in client experience (75% vs 34%) and achieve substantially better outcomes in operational productivity (82% vs 50%) and speed of execution (82% vs 56%).

However, many firms continue to face structural barriers that limit their ability to do so. Fragmented infrastructures, poor interoperability and inconsistent data remain significant obstacles to transformation, with integration issues across systems identified as the most commonly cited barrier to scalable growth, ahead of budget constraints or skills shortages.

These weaknesses are becoming even more consequential as firms accelerate AI deployment across front-office and back-office activities.   The research showed that Leaders have already completed more of the enabling work: 53% prioritise improving data quality and operational AI, compared with 33% of Followers. By contrast, Followers remain more focused on addressing immediate operational pressures, with 42% prioritising the reduction of manual effort and errors, compared with just 19% of Leaders, while also relying more heavily on externalisation as a short-term relief mechanism.

As a result, firms with weak operational foundations are therefore finding it significantly harder to scale AI effectively.  This indicates that AI is becoming less a shortcut around operational complexity and more a stress test of firms’ underlying operating models. Organisations with stronger data governance, connected workflows and more mature infrastructures are significantly better positioned to embed AI into business processes and deliver measurable outcomes.

Importantly, the research finds that firms with extensive adoption of as-a-service models report double-digit profitability growth regardless of firm size, suggesting that externalisation is evolving from a cost-efficiency tactic into a strategic lever for long-term growth.

The findings suggested a change in how financial institutions approach transformation, moving from selecting technology to orchestrating capabilities across an increasingly complex ecosystem. On this point, Marciano observed: “Conversations with clients have shifted from deliberating on technology adoption to focusing on the desired business outcomes and the most effective strategies to achieve them. The key question is what enables these outcomes. Here, clarity is key to effective orchestration of investment programmes across their ecosystem. It is important to determine whether they deliver at scale or simply add complexity.”

Key takeaways

• Leaders are significantly more likely to report profitability increases above 15%, demonstrating a direct link between scalability and financial performance.
• Integration issues across systems are identified as the single biggest barrier to scalable growth.
• Externalisation and as-a-service models are a primary lever of profitable scale, regardless of firm’s size.
• Competitive advantage will not come from where AI is deployed, but from how it is embedded and translated into business outcomes.
• The strategy is the sequence: foundations first, externalisation as accelerator, AI as amplifier.