There are many points within the client experience, including onboarding, where high-quality digital interactions can help enhance client-bank relationships and give clients access to a broader range of services. https://www.youtube.com/watch?v=niihKFGO4Hw
WealthTech companies have been growing in recent years thanks to an increase in investments into this space. CB Insights recently categorized more than 90 of them into 7 main categories (based on the services and software they offer) and three main subcategories (based on the client group they serve) on this WealthTech market map.
New technologies within the FinTech and WealthTech spaces are bringing new opportunities for everyone to invest the same way the privileged do, opening up the space for new startups to offer bold new services to millions. https://www.youtube.com/watch?v=XwDVYGRM8WQ
Almost USD 17 billion in investments in challenger banks over the past five years has driven the growth of WealthTech funding. In fact, investments have increased over that period at a CAGR of 49.7%, with the average size of deals almost quadrupling from USD 4.8 million to USD 18.6 million. https://www.youtube.com/watch?v=Y9Ku3A0x9EM&list=PLvqG7xXdquNliv2zgGRsMcpjFwwknNFp3&index=18
CB Insights analyst Matt Wong gives a brief overview of WealthTech and millennials relationship with it. https://www.youtube.com/watch?v=YLd4i0LXhxk
For those looking to invest funds as a way to make money with money, there are 7 main ways to consider in the Russian market:
According to economist Kubat Rakhimov, Kyrgyzstan has work to do if it is to ensure that laborers working abroad will make investments into the Kyrgyz economy. Specifically, he notes that the government needs to engage with the real economy and create attractive investment conditions. In this way, investments will happen naturally, including those coming from remittances sent from that laborers working abroad. It will also be important for financial institutions to create reliable tools that will allow money from remittances to easily be put into the financial and credit system for use in investments. Perhaps the most important step, however, is the creation of an investment securities market.
Bakai Bank has launched a new service – depersonalized metal accounts. The service allows consumers to conveniently invest in grams of gold, silver and platinum. The depersonalized nature of the service means that consumers do not have to worry about transporting and storing metals. It also allows for easy and quick conversion into currencies. Although such accounts do not accrue any interest, consumers benefit from being able to convert metals into currencies at any time that is convenient to them, including when prices of the metals are higher than when they purchased them. Moreover, precious metals are generally a stable and reliable asset over longer periods of time. Bakai Bank is the first in Kyrgyzstan to receive a license from the country’s national bank to operate such a service.
Income cards have become popular around the world due to their convenience and the benefits they provide. For example, some income cards not only serve as a bank account, they also offer reward programs and generate interest on existing balances. For banks, income cards have become a key way to attract and keep consumers, all the while also receiving commission income. For this reason, banks are continuously updating their income card offering. At the same time, banks are also placing conditions on consumers to receive benefits. For example, many banks tie interest benefits to card turnover, average monthly balance or type of income. Moreover, banks are generally afforded the chance to unilaterally change conditions for such cards at any time, placing the onus on consumers to track such changes. Although income cards are attractive for consumers and are likely to remain as key selling points for banks, consumers should be vigilant in monitoring the conditions for receiving card benefits.
A recent survey of 1,600 Kazakhstanis from 45 locales around the country indicates that a majority (55%) pay attention to the financial information of financial institutions, including credit rating and amount of equity. At the same time, more than half also indicated that they are still not ready to give up high interest rates and cashback incentives to switch to those that have more financially sound figures. 46% of Kazakhstanis also use savings products for major purchases such as an apartment, while 29% use them for short-term expenses such as repairs and vacations. 8% indicated saving in high-yield deposit accounts, and 18% distribute savings between non-term and deposit accounts. Interestingly, a large majority (76%) trust the value of the Kazakhstani tenge, with 52% saving only in tenge and 24% savings in tenge and a foreign currency.
With Uzbekistan’s national currency depreciating for 15 consecutive weeks and the United States dollar setting new records almost every 2 weeks, here is an overview of the 7 financial institutions in Uzbekistan that offer online foreign currency deposits:
Yandex Money and Phinex Plus have launched Yammi, a trust management service to help investors invest in Phinex ETFs. Yammi is a roboadvisor that offers investment recommendations based on a computer algorithm that defines user profiles. Despite the promise of the new system, there are still issues with it. For example, the system tends to define users as having a more aggressive risk appetite than they actually do. Another concern is that account replenishment and withdrawals can only occur through Yandex Money, which itself comes with somewhat inconvenient limits and commission fees. In short, while Yammi is an intriguing glimpse into the potential future of investment management services, it is clear that its shortcomings need to be addressed before it will become an easy-to-use and convenient-for-consumers service that will radically change the way we invest.
Tinkoff Bank Group plans on launching the Tinkoff Capital Management company in the 4th quarter of this year. The company will offer clients exchange funds for investments, with an entry threshold of just RUB 50. Funds will be tied to assets in both rubles and dollars, although the exact list of instruments has yet to be disclosed. It will be possible to manage investments only on the Tinkoff website or through a mobile application. The company hopes to eliminate the so-called “black box effect”, in which clients of management companies do not necessarily know the nature and condition of their investment portfolios at most times, by allowing users to look at the structure of their portfolio and make adjustments at any time. Tinkoff expects more than 100,000 clients within the first year of operation.
Russia’s National Financial Association, a self-regulatory organization, has issued its first official accreditation to VTB Capital Investment under a program to provide individual investment recommendations to users via roboadvisors. Roboadvisors help clients form individual investment portfolios of stocks, bonds and index fund shares. After filling out a questionnaire, the roboadvisory service determines the client’s risk appetite and other specificities and then recommends a set of securities. The service also monitors the status of the portfolio in real time and makes suggestions for more profitable securities.The company expects that more than 150,000 clients will take advantage of the roboadvisory service.
A relatively new concept in making investments is allowing investors to buy shares of rare cars and other rare items. For example, New York-based company Rally Rd. offers users the chance to buy shares in rare cars like Ferraris and Mustangs for as low as USD 5 and plans on adding new assets (e.g. wine, whiskey, watches, sports awards and rare books) in the near future. Similarly, Brooklyn-based startup Otis plans on launching in the near future and will allow users to invest in art masterpieces. The trend for alternative types of asset investments began with the real estate industry in 2010, when startup Fundrise let users acquire small shares (as low as USD 500) of real estate. The main goal of all these types of startups is to solve problems with access to capital and liquidity. Such startups also allow investors to diversify their investments and invest in something that does not depend on stock market fluctuations. Although the alternative assets market is growing, it is still small and in its infancy. As such, it remains to be seen just how popular such services will become and what their real impact will be in the future.
A seemingly infinite number of startups and simple banking applications offer users the ability to easily track and view their spending habits. But English startup Cleo is taking this a step further by not only letting users track where their money is going but also letting them actively influence this. Cleo, a self-described financial advisor, helps users budget by letting them proactively set spending rules (i.e. no more than USD XX to be spent at restaurants per week/month). Cleo also hopes to eventually give users the chance setup blocked transactions that will automatically block any transaction that violates the user’s rules. Cleo works by linking banking information with the Facebook Messenger app. Cleo then communicates with the user as a chatbot via the Messenger app. Cleo also offers users the chance to save money in a separate account and, via a paid subscription, get cashback rewards.
FinTech startups are reshaping the financial world, including wealth and asset management. Here are 6 WealthTech startups that are promising to change the way we manage our wealth:
FinTech startup Kindur is helping put retirees at ease by helping them manage their retirement funds and ensuring they have enough money for the rest of their lives. Launched in April, Kindur is a free-to-use service that, based on a series of user responses, offers users a free preliminary plan containing a number of financial recommendations. Kindur coaches are also available to discuss options with users. If a user decides to ultimately become a Kindur client, they simply transfer their investment accounts to the platform and pay an annual fee of 0.5% of their investment assets. The company also offers clients the Horgan Approach of fixed annuities, which many hail as a great option for those with savings but no pension plan beyond social benefits.
British FinTech firm Revolut is jumping into the online brokerage space with its own commission-free stock trading platform, which is being run in partnership with U.S. broker DriveWealth. The company launched the service, which lets users buy or sell popular stocks with the tap of a button, as a way to lure millennials who normally shy away from investing. The Revolut service also allows users to buy fractions of shares for as low as USD 1. The company hopes that this will allow young users to develop their personal wealth from a younger age in a way that is comfortable, easy and low-cost. Revolut’s service doesn’t currently charge commissions; however, it will eventually apply pass-through fees where applicable and a 0.01% custody fee. The company also hopes that users, once comfortable with the service, will opt to move beyond its basic services and pay for premium offerings. Revolut currently has over 6 million users and was last valued at USD 1.7 billion in value.
In emerging market countries where economic volatility is a way of life, there aren’t a lot of relatively safe options for the up-and-coming middle class to save their money. In Nigeria, two startups are giving Nigerian investors a way to save their money through high-yield government bonds, which can absorb wild swings in the value of the country’s local currency and still provide a healthy return. While both CowryWise and Piggybank offer users relatively simple savings solutions, there are subtle differences between the two. For example, the CowryWise platform uses Meristem Financial as an asset manager for investments in the bond market, whereas Piggybank works primarily with banks. Piggybank also requires a three-month savings period before investors can withdraw funds, whereas CowryWise lets users withdraw funds immediately. Despite the differences, both are important steps forward in allowing Nigerians the chance to save and make sound investments.
Zurich-based WealthTech company Additiv has become a worldwide leader in the field of digitization for wealth managers. In Asia, the company is driving a wide-angle perspective and helping wealth management become more democratized, enabling more and more people to access wealth management solutions – all thanks to the rise of digital innovations. Additiv is accomplishing this through a combination of ensuring its services (especially its roboadvisory services) are fine-tuned to Asian markets and giving consumers greater information and control over their investment holdings. Specifically, Additiv is committed to providing its users with a 360-degree view of all their holdings and providing them with the functionality and flexibility to maximize the use of their holdings. Perhaps most importantly is that Additiv accomplishes this through an easy-to-use and simple-to-access online platform that has published APIs that allow for financial institutions to be integrated into the Additiv system with minimal effort. While the full impact of Additiv in Asian markets remains to be seen, it is clear that the company is poised to become a market leader in the region and drive innovations well into the future.
With 75 companies operating in the sphere, WealthTech has become a thriving subset of FinTech in Switzerland. Here are 11 of the more notable Swiss WealthTech companies:
Understanding personal finances and the tools to manage them are an important step toward financial literacy. Fortunately, modern technology has made this step easier to obtain for more people. We’ve scoured the internet and app stores to compile this list of the top 5 most interesting personal finance apps, at least one of which will no doubt help you improve your own personal finance skills with nothing more than the flick of your fingertip. CoinKeeper Price: free trial, then USD 3.99/month or USD 15.96/year (some functions are only available in the paid version) Availability: iOS and Android Description: incomes, savings and expenditures are represented as piles of coins. A simple drag-and-drop action is all that is needed to record any financial transaction (incoming or outgoing). You can even set monthly limits on spending categories. Useful functions: recognition of bank SMSs (for Russian banks), choice of preferred budgeting period (weekly or monthly), data exports (in an MS Excel format), joint budgeting, password protection, multiple device support, notifications Analogues: Mint, Prism https://www.youtube.com/watch?v=k3l57QTuQVM Spendee Price: free 7-day trial and free basic plan; paid plans for multiple wallets (users) start at USD 1.99/month or USD 14.99/year Availability: iOS and Android Description: with this app, costs can be monitored manually or automatically via a synchronization with a bank. Spending estimates can then be tracked in a variety of ways, including through the use of an easy-to-read pie chart. Useful functions: extended statistics, easy setup for savings, a common account for family and friends, bill/receipt photo support, notifications of regular expenses, data backup, connections to electronic and cryptocurrency wallets, multi-currency support Analogues: Toshl Finance https://www.youtube.com/watch?v=XPaYNlla-6A Monefy Price: free and paid (USD 2.48) versions available Availability: Windows, iOS and Android Description: this app allows you to record incomes and expenses (even before initial setup of the app) by simply entering amounts and hitting either a plus (for incomes) or minus (for expenses) button and selecting an appropriate category. Useful functions: password protection, synchronization with other devices (via Google Drive or Dropbox), accounting in several currencies Analogues: Daily Budget https://www.youtube.com/watch?v=chflLn-ZKc0 You Need A Budget (YNAB) Price: free 34-day trial, then USD 6.99/month (billed annually at USD 83.99) Availability: Windows, iOS and Android Description: according to YNAB developers, the most important aspect of financial management is planning. The app works by asking you to categorize each transaction. When it detects an unexpected expenditure, it automatically adjusts your budget (by, for example, reducing the available budget for “entertainment” expenses). Currently, the app only supports one currency and requires a desktop installation. Useful functions: joint budget management Analogues: Goodbudget https://www.youtube.com/watch?v=C4VJ4v_Y_d8 Tyazhelovato Price: free Availability: iOS and Android Description: this app tells you how much you can spend each day once you indicate the frequency and amount of any income you receive. If daily expenditures exceed this amount, the app recalculates your budget. The app currently does not support statistics or accounting as its main function is only to support you in getting through to your next salary. The app is also only currently available in the Russian language. Useful functions: support in three currencies: RUB, USD and EUR Analogues: Bills Monitor
Startups are playing a huge role in innovating the wealth management industry. Our friends at Plug and Play got in touch with 6 of the most relevant ones to get their views on the industry they are helping reshape:Grove https://www.youtube.com/watch?v=Dq7Xzl0oMLo Agolog https://www.youtube.com/watch?v=67bSea-oofk Rocket Dollar https://www.youtube.com/watch?v=USAR8tFtqEo Say https://www.youtube.com/watch?v=CyyRGfzuFZE Compound https://www.youtube.com/watch?v=ZpQWWDwiW-A Accern https://www.youtube.com/watch?v=4iNETX01xgw
The boom of technological innovations and creativity in the financial sphere has given us numerous interesting and beneficial concepts. One the more recent among them is the idea of collective investments (i.e. crowdfunding). In fact, crowdfunding platforms have become very popular in the last few years, with the crowdfunding market growing by almost 50% globally each year. Moreover, 2019 saw the emergence of several new players, and many FinTechs are hoping to get in and carve out their place in the growing market. But does this mean that a crowdfunding boom is in our future? While it very well may be, there are a number of things that need to be figured out before it becomes a standard place to invest substantial amounts, including regulatory issues, taxation issues, making easy-to-understand portfolios and how to handle delinquencies and defaults. That is not to say that crowdfunding should be avoided completely. In fact, it is likely to become a great investment tool in the near future. For now, however, investors need to realize that there is a moderate-to-high risk in such investments and that it should not be the only place where investments are made. Regardless, the future looks bright for crowdfunding.
For better or worse, all kinds of industries use artificial intelligence nowadays, and wealth management is no exception. In fact, artificial Intelligence is one of the main trends in the wealth management industry and will change the industry forever for both consumers and companies alike. The three biggest impacts are likely to be:
Traditional banks and credit unions have been losing the battle to attract deposits in a hyper-competitive environment. Many have attempted a number of different efforts to reverse this trend and drive organic growth; however, such efforts are often difficult to sustain and have seen mixed results at best. Some are now turning to artificial intelligence as a way to harness data analytics and deep insights, resulting in them being able to offer consumers a more personalized, enriched and financially-beneficial banking experience. Soon, it is expected that innovations stemming from artificial intelligence will not only drive deposits back to these financial institutions, they will also become the new bar for what consumers expect. Financial institutions that embrace such smart innovations now stand to benefit from more robust deposit growth as well as deeper and more long-lasting consumer relationships.
FinTechs are entering the wealth management industry at a record pace, and many traditional wealth management companies are not thrilled. But the fact is that FinTechs are bringing speed, radical innovations and visibility into the market. Although nobody can predict the next big disruption and how it will play out, nobody also wants to be Yahoo! missing out on purchasing Google for USD 1 million or Blockbuster declining a partnership with Netflix. Traditional players should wake up and examine the benefits of collaboration or risk being at a disadvantage in an industry that is about to get even more competitive. Source
As the wealth management industry evolves, wealth management firms must reinvent themselves and take advantages of cutting-edge technologies to enhance consumer experiences and provide greater personalization. Here are five key things wealth managers need to keep in mind going forward:
With the wealth management industry consolidating and moving towards standardized and streamlined processes based on technological solutions, there will inevitably come a breaking point when technology for technology’s sake becomes old and consumers want more. In this context, it will be important for wealth managers to offer a mix of creativity, simplicity and effectiveness that moves beyond a mass-market, cookie-cutter approaches and towards ones that take into account the specific needs and objectives of consumers and their families. This creativity and personal attention, however, should extend beyond what is expected from traditional investment strategies (e.g. a charitable remainder trust). The most effective wealth management strategies in the future will require intimacy and a personal touch. As such, wealth managers will be smart to remember that there will never be a substitute for personal service.