WealthTech Defined

Ah, a new word is born. WealthTech is the result of the fintech sector concentrating on the wealth management and retail investment segment. Yeah, now we get it and its an awesome name. Think robo-advisors, platforms, research tools and risk management. Packaging all the new technology relevant to the wealth management sector into a new name – WealthTech – is brilliant. A great read here.
(Bill Taylor/CEO)

“WealthtTech is the word of Q1 here at Level 39 (a European technology accelerator). However, we ask what is WealthtTech and where are the real disruptive changes likely to occur. WealthtTech has become defined as the FinTech sector that focuses on enhancing wealth management and the retail investment process. The most visible players are the robo-advisors but other concepts are deserving of attention. Technology derived from wealth management firms, research tools that generate investment solutions, and platforms to support financial advisors—all fall under WealthtTech .

Whilst the term robo advisor has gained traction, few digital asset management firms appreciate the label. This is as few players match the regulatory definition of ‘advice’ and not all parts of the process are automated. The term ‘semi-automated digital guiders’ whilst more accurate isn’t quite as snappy and has yet to catch on.

Simply having an on-line presence in an asset management or advisory firm for us doesn’t  reach true ‘WealthTech’ – for us not only must the technology work and meet the needs of the business, but it must also be novel, surprising and transformative.

The risk to the FinTech sector is that disruption comes from outside the industry. Firms that place technology at the forefront with almost unlimited R&D resources not with one eye on the clock to the next funding round. Indeed many non-financial firms are entering the space with ideas and concepts for both UX and customer on-boarding. With FinTech’s relentless focus on innovation we see it likely that AI interfaces and seamless on-boarding experiences are likely within the next five years. But because of this they are likely to be a) commoditised and b) supplied by a non-financial player. IBM being the go-to choice at the moment for legacy players for their Artificial Intelligence needs, rather than a FinTech startup….”

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