Fintech Trends in Asset Management

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Asset Management Fintech Trends

We are in the midst of the digital revolution. The banking industries are dramatically influenced by innovations, frequently contributed by evolving fintech (shortened from Financial Technology). Notably, specific segments such as insurance, payment, and banking have been subject to significant technological amendments.

However, the Asset and Wealth Management (AWM) seems to be an exception in this regard, as per the recent PwC report. Only 52 percent of traditional AWM business CEOs believe that technology will have a positive impact on their industry. And, at present, only 30 percent of AWM businesses are genuinely engaging in partnerships with fintechs.

Increased expectancy in the future

One can expect an increase in this figure shortly because it’s no secret that fintech is shifting Asset Management as well. Although innovation in this area has been lagging for a few years, it is slowly taking off. The AWM segment is gradually growing to be lucrative.

Approximately $78.7 trillion in assets were globally managed in the AWM segment in 2015. And the predictions for the future are much more fruitful, primarily due to the steady economic progress in Asia.

Fintech Shapes Asset and Wealth Management

Asset and wealth managers are more likely to face a massive failure if they don’t adopt the responsive digital strategies of fintech firms. By being too contented, they will risk losing their core clients who are mainly interested in inexpensive alternatives to learn asset management because they underrate the looming technological revolt.

Additionally, the asset and wealth managers might miss the opportunity, tapped by Fintechs, to win the broad affluent market. So, paying close attention to how fintech is remodeling the financial sector seems like the most rational way forward.

Did you know that almost 60% of them fear losing part of their business to fintech companies?

Adoption of Automated Wealth Allocation Services

The automated investment solutions are currently limited to shares, bonds, mutual funds, and exchange-traded funds. However, with future augmentations in fintech, we are more likely to see leveraged instruments and structured investments employing the features of automated solutions in real-time.

Security Tops the List

Security and data privacy plays a crucial role in winning customer confidence and catalyzing fintech adoption. And fortunately, of all the features offered by fintech, security tops the list today. Facial recognition, among other developed technologies, will serve as the barricade breaker between a customer and his/her data.

Advancements in the identity verification and document management are still the required conditions for the all-inclusive adaptation of most fintech. And, I am sure that the discussions regarding fintech security will go on for at least the next couple of years, which is said to reflect in the unrelenting security improvement surely.

Data Analytics and Additional Revenue

Fintechs moniker move is cost reduction along with the high additional revenue. The asset and wealth managers can achieve it only if they are capable of discovering how to balance the personal touch and technology to match the client experience received from other service providers to their benefit.

Besides, the majority of them saw data analytics to be the most crucial trend in AWM. The capability to transmute and examine the data after capturing it has now become essential to the asset and wealth manager to be able to contend. Being able to scrutinize data also aids in managing compliance and risks while refining trading efficacy.

Fintech is Still at Embryonic Stage

As it is still at its early stages of development, the asset and wealth managers must work hand-in-hand with fintech players to succeed. Alongside this, the traditional players must be more open to the upcoming ideas of engaging with the fintech players. And, I believe, those who do not engage with fintech companies at all are not truly enthusiastic about acquiring fintechs.

It’s Now or Never Again

Collaboration with fintech has become crucial now, and it will be the only way for traditional firms to keep up with the pace while delivering technological solutions. Asset and wealth managers who want to win in the redesigned market must-watch fintech companies closely and thereby adopt a responsive digital strategy. Or else, they may lose a part of their business to new entrants in the market.