One-click wealth management

Date: 23 Feb 2017

Bumblebee Design

According to Shane Williams, co-head of UBS SmartWealth which is their new robo-investment platform, fintech is following the model of retail, putting the user experience at the forefront of development.  He says that everything we’ve witnessed as a gold standard in the Amazon product is ease of use design which allows the customer to access information and complete transactions. “That is the bar against which all financial sector firms are going to be judged. No one expects transferring money or checking the account balance to be harder than buying electronics on Amazon.”


Unstoppable finnovation

The problem with fintech is that it requires a substantial investment whilst taking years to see returns. While many financial institutions have been slow to participate, it seems that times are changing.  In the first half of 2016 alone, fintech investment exceeded $15 billion dollars, according to CB Insights which are compiled in collaboration with KPMG.

Nancy Yamaguchi, partner and global head of technology practice at Withers, agrees that  the banking industry has now embraced fintech. “Fintech has been an area of concern for many banks. In fact, only two years ago Wall Street has been in panic mode because an estimated $4.7 trillion in revenue and $470 billion in profits from traditional financial services was soon to be supplanted by the onset of technology in the sector,” adds Yamaguchi. “A more recent trend is that those banks are now acquiring start-ups to keep up with the banking revolution and to avoid becoming a victim to what technology has done to print journalism or bricks and mortar retail.”

Another reason why many financial institutions have been dragging their feet when it comes to investing in fintech is the lack of interest in current offerings from their established wealthy clientele. However, Patrick Barnert, CEO and board member at Qumram, a compliance software company that work with UBS, says: “Banks have finally understood that in the next two decades, trillions will be inherited by today’s millennials, and they will place their money wherever they receive the best experience.”


WhatsApp meets fintech

Wealth managers have always relied on face-to-face interactions with private clients and this is not likely to change. “However,” says Barnert, “tech companies can work hand-in-hand with wealth managers to improve online interactions. Social media is a great example. Demand for the messaging tool WhatsApp for client-adviser or trader-trader interactions is increasing.”

Shane Williams confirms this point and adds that the rise of chat-based interfaces, whether a text chat format like WhatsApp, Facebook Messenger or voice chat like Amazon Alexa, Google Home and Siri, are on the rise. “From simple question and answer to full digital assistants that use a natural language processing (NLP) and artificial intelligence,” many fintech advances will be adopted.” In the B2B space, Williams forecasts more collaboration with wealth managers, more process automation, and better CRM tools to help advisers manage client information and share client data.

A good example of how fintech can work for wealth management is what UBS has been implementing with IBM’s artificial intelligence system Watson which is a cognitive system the creates a connection between people and computers, according to Chris Skinner, a fintech commentator.  “The system analyses all of their thousands of clients’ investments non-stop in real-time, and provides alerts and analytics on a scale that could not have been considered just a few years ago,” he says. “The result is that when any UHNW client looks at their app, they see a personalised presentation of their portfolio with buy and sell recommendations tailored to their risk appetite and updated in real time.”

This personalisation and greater autonomy in managing wealth seems to be one of the most attractive facets of fintech from the client’s point of view. Sarah Newman, director of wealth management practice at PwC, says that millennials are far less trusting than their parents and want to be much more involved in their finances.

Whilst relationships will always remain key for substantial families it seems that our natural tendencies towards quick messaging and Amazon one-click-shopping are driving wealth managers more quickly into fintech hands.

This article was published in Citywealth Weekly, our mid-week roundup of the hottest news and exclusive expert comments. Sign up here to start receiving the Weekly in your inbox.