How is fintech is reshaping asset & wealth management industries?
Two industries shrouded in legacy and well-known for slow evolution have received a wakeup call with the surge of new fintech firms globally, accelerating innovation at an unprecedented rate. Customer expectations are being completely reshaped across financial services through a combination of technological advancements, regulatory changes and the consumption of non-financial products and services. As a result, the industry is now focusing on customer advocacy ahead of product advocacy, a long overdue change in mindset. As a prominent example, robo technology is challenging traditional wealth management models by offering lower-cost automated advice that has democratised investing for consumers under served in the past. New fintech solutions are also resulting in operational efficiencies and risk reduction by providing STP multi-channel support.
How do you evaluate a cooperation between incumbents and fintechs in wealth management, and how can they benefit from it?
The decision to build, buy or partner is one taken seriously by both incumbents and fintechs. 2016/17 saw numerous mergers and acquisitions in the robo-space and an increasing number of partnerships in the AI and blockchain space. There are definitely lessons that incumbents and fintechs can learn from one another. Fintechs are challenging existing business models and the thought processes in enterprise firms, pushing the enterprise firms to work in more innovative ways to create new tools and services. There are further challenges in the ability of incumbents to innovate at the same pace as fintechs. Conversely, larger institutions can assist fintechs that lack the distribution channels in marketing their solutions and bringing their products to market. SEI has experienced this first hand through our regtech incubator, Codify that houses and supports regtech start-ups that are strategically and culturally aligned with SEI, with a view to a possible future long term partnership.