The WEALTHTECH Book

The WEALTHTECH Book

by Susanne Chishti, Thomas Puschmann
Released July 2018
Publisher(s): Wiley
ISBN: 9781119362159

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Book description

Get a handle on disruption, innovation and opportunity in investment technology

The digital evolution is enabling the creation of sophisticated software solutions that make money management more accessible, affordable and eponymous. Full automation is attractive to investors at an early stage of wealth accumulation, but hybrid models are of interest to investors who control larger amounts of wealth, particularly those who have enough wealth to be able to efficiently diversify their holdings. Investors can now outperform their benchmarks more easily using the latest tech tools.

The WEALTHTECH Book is the only comprehensive guide of its kind to the disruption, innovation and opportunity in technology in the investment management sector. It is an invaluable source of information for entrepreneurs, innovators, investors, insurers, analysts and consultants working in or interested in investing in this space.

•    Explains how the wealth management sector is being affected by competition from low-cost robo-advisors

•    Explores technology and start-up company disruption and how to delight customers while managing their assets

•    Explains how to achieve better returns using the latest fintech innovation

•    Includes inspirational success stories and new business models

•    Details overall market dynamics

The WealthTech Book is essential reading for investment and fund managers, asset allocators, family offices, hedge, venture capital and private equity funds and entrepreneurs and start-ups.

Table of contents

  1. Preface
  2. About the Editors
  3. Acknowledgements
  4. 1: Introduction
    1. The Augmented Investment Management Industry
      1. Clients are Changing
      2. Connecting Market Data and Client Data
      3. The Fourth Epoch – The Marketplace of Wealth Management
      4. Notes
    2. FinTech Disruption Across the Wealth Management Value Chain – Will FinTech Dominate the Wealth Management Model of the Future or is there Still a Place for Traditional Wealth Managers?
      1. Definition of Wealth Management
      2. Wealth Management Value Chain
      3. What’s Driving Disruption in the Wealth Management Industry?
      4. Changing Customer Profile
      5. Where is the Current FinTech Development Focused Across the Wealth Management Value Chain?
      6. Where Will Innovation Disrupt the Wealth Management Value Chain?
      7. How Can Existing Wealth Managers Address the FinTech Challenge?
      8. Wealth Managers Need to Consider Partnering with FinTechs to Keep Up With the Pace of Innovation
      9. Disruption of the Wealth Management Value Chain Has Just Started
      10. Notes
    3. Embracing Emerging Technology
      1. Notes
    4. WealthTech – Business as Unusual
      1. The Attraction for High-Net-Worth Individuals
      2. Collaboration with the Wealth Management Industry
      3. Looming Danger of Becoming Obsolete
      4. Competing Against Mutual Funds
      5. Test of Survival for FinTech Companies
      6. RegTech Becoming Stricter
      7. Conclusion
      8. Notes
    5. Welcoming an Artificial Intelligence Robot as a Colleague
    6. Essential Digitization in Wealth Management
    7. Becoming Millennial-Minded is Key for WealthTech
      1. Embrace New Technology
      2. Realize that you Can’t Rely on your Brand’s Laurels
      3. Notes
    8. “To Infinity and Beyond!” – Building WealthTech Applications has Never Been Easier
      1. “LEGO” – Enabled Bricks for Applications
      2. So How are the “Lego” Bricks Being Put Together?
      3. Once the “Lego” Pieces are Found, and Relationships Linked… What are the Opportunities Moving Forward? Where Can WealthTech Go Next?
      4. Notes
  5. 2: Digitizing Client Advisory and Robo-Advisors
    1. Ten Reasons Why Digital Wealth Management Will Become a Worldwide Market Standard
      1. Notes
    2. What Do Wealthy Clients Think About Digital Wealth Management?
      1. Today’s Client Preferences
      2. Tomorrow’s Client Preferences
      3. Technological Affinity
      4. Projections
      5. Conclusions
      6. Notes
    3. Challenges of Digitizing Wealth Management Advisory
    4. The Hybrid Advice Model
      1. The Future is Now for Digital Advice
    5. No “One Size Fits All” – Personalized Client Service and Social Selling in Wealth Management
      1. The Era of Wealth Management /Private Client Disconnect
      2. Starting a New Approach
      3. There is More to Be Done in a Slowly Changing Landscape
      4. Notes
    6. How to Give “Sleep-Tight” Robo-Advice
      1. Notes
    7. How Gamification Can Attract Consumers to Sign Up
      1. Gamification and Financial Management
      2. Conclusion
      3. Notes
    8. The Counter-intuitive Reality of Robo-Advice Demographics
      1. Millennials as a Robo-Advice Target Client Segment
      2. Early Adopters and Baby Boomers: Certainly Not Mutually Exclusive
      3. Online Advice Has a Value Proposition Relevant for Older Generations
      4. The Road Ahead Provides Services Across the Demographic Spectrum
    9. How Emerging Technologies Will Change Emerging Markets – Welcome Robo-Advisor X.0!
      1. Robo-Advisor X.0 – Hugs and Kisses
      2. Robo-Advisor X.0 – Mathematical Programming Problem and Optimal Solution
      3. Robo-Advisor X.0 – Executive Officer
      4. Summary
      5. Notes
    10. Presentation Technology – Enriching the Client Experience in a Physical and Virtual World
      1. Facilitating Client Experience at Scale
      2. Personalized Financial Content
      3. Increasing Demand for Compliant Content
      4. A Solution
      5. The Future
    11. Digital Super Powers – The Role of Artificial Intelligence in Wealth Management
      1. Notes
    12. Using Artificial Intelligence in Wealth Management
      1. What is AI?
      2. How Can AI Be Used in WM?
      3. What About the Risks of Using AI?
      4. Can AI Replace Human Intelligence?
      5. Conclusion
      6. Notes
    13. Digital Asset Management in 2020 – Seven Theses
      1. Robo-Advice Goes “Hybrid”
      2. The Third Generation of Robo-Advice Gets Smarter
      3. Robo-Advice Moves All-Finance
      4. Specialized Robo-Advisors Will Rise
      5. Financial Education is Increasing
      6. Being Compliant Will Make or Break Robo-Advisor
      7. Mass Retail Asset Management Strives for Zero Marginal Costs
    14. Making Digital Advice Personal is as Important as Making Personal Advice Digital
      1. Conclusion
      2. Notes
  6. 3: Digitizing Wealth Management Operations
    1. Digital Business Model for Wealth Management Operations as Matchmaker of Generations
      1. Low Cost/High Value?
      2. But What Does This Mean for Wealth Management Operations in General?
      3. Omni-channel as the New Mantra
      4. Beyond Systems and IT – The “Big Picture”!
      5. Alignment of Business Perspectives
      6. Balancing Complexity and Profitability
      7. There is No One-Size-Fits-All Approach
      8. Notes
    2. How a Digital Architecture Can Lead to Tangible Business Results
      1. Legacy Mindset Holding Us Back
      2. And Digitization is Much More Than a Cool App
      3. Achieving Quantifiable Business Results
      4. Managing the Customer Life Cycle
      5. Onboarding is Part of the Game
      6. Digitization Benefits All Types of Customer
      7. Ease for the Customer is Usually Easy for You
      8. Client Service/Maintenance
      9. Compliance and Regulators are Also Part of the Fan Base
      10. IT as a Foundation
      11. Identify the Utility Part of Your Business
      12. “Backboning” Your Financial Proposition
    3. The Personalization Pillar
      1. The State of the Industry
      2. The Four Pillars of Digitization
      3. Harnessing Hyper-Personalization
      4. Truly Personal Service
      5. Notes
    4. Digitizing Wealth Management
      1. At the Blink of an Eye
      2. Wealth Management is Already Digital
      3. Financial Algorithms – Pillar One of Next-Level Digital Wealth Management
      4. Automated Execution – Pillar Two of Next-Level Digital Wealth Management
      5. Digitizing Wealth Management Progresses Rapidly
      6. Notes
    5. Survival of the Fittest – Cyber Resilience
      1. Cyber Security as a Competitive Edge for Wealth Managers
      2. Adopt a Strategy that Offers Cyber Resilience
      3. Increase Customer Experience with Cyber Resilience
      4. Target Your Cyber Security Investments
      5. Put the Customer at the Centre of Your Cyber Resilience Strategy
      6. Wealth Managers Should Learn from the Technology Firms
      7. Notes
  7. 4: Digital Platforms, Products and Ecosystems
    1. Wealth Management-as-a-Platform – The New Business Architecture with PSD2
      1. Platforms are Taking Over the World
      2. Why Banking as a Platform has Failed to Emerge
      3. PSD2: Opening Pandora’s Box
      4. Platform Roadmap
      5. Conclusions
    2. Wealth Management – Preparing for a Digital Revolution
      1. Changing Client Behaviours
      2. Emergence of New Technology
      3. Emergence of Digital Platform Economy
    3. How to Digitalize Wealth Management at Banks
      1. Digital Financial Battlefield
      2. Traditional Wealth Management Frameworks Under Attack
      3. Digital Wealth Management Frameworks: New Powerful Strategic Tools
      4. Survival in Wealth Management: Hybrid Transformation Options for Banks
      5. Building Digital Wealth Management Frameworks: Dealing With the Complexity of Financial Markets
      6. Three Steps to a Digital Wealth Management Framework
      7. Keeping the “Time-to-Market” Short is Important
    4. Key Success Factors in Gaining Market Share and Scale in Alternative Lending
      1. Key Ingredients to Achieving Scale: TVFO
      2. The Linking Pins and Enablers: PRVM
      3. Interdependence Within the Ecosystem: Vulnerable to Contagion
      4. Conclusion
    5. Personal Financial Intelligence – AI and the Future of Money Management
    6. Financial Forecasting and Portfolio Optimization in the 21st Century
      1. A Very Brief History of Time and Technology
      2. “Quant Funds”, Machine Learning and Other Trending Technologies
      3. Supervised and Unsupervised Machine Learning
      4. Unsupervised Machine Learning
      5. Putting it All Together, Portfolio Sciences for the 21st Century
      6. Notes
    7. AI-Powered Wealth Management Products and Investment Vehicles
      1. Complexity of the Financial Markets and Big Data
      2. AI and Deep Learning: Adaptable and Self-Learning Capital Markets Modelling and Forecasting
      3. Partially Versus Purely AI-Driven Investing
      4. AI-Powered Investment Vehicles
      5. “AI-Smart”-Beta ETFs
      6. AI-Driven Sector (ETF) Rotation Strategies
      7. Autonomous, Pure AI Hedge Funds and Reinforcement Learning
      8. Plurality of Uncorrelated AI and Alternative Data-Driven Strategies
      9. AI and the Future of Finance
      10. Notes
    8. Wealth Managers Can Deliver Effective Client Outcomes with a Data-Driven Investment Process
      1. Systematization of Investment Decision-Making
      2. Research and Data
      3. Investment Technology and Communications
      4. Risk Reduction
    9. The Business Case for Gender Equality
      1. The Case for Gender Equality
      2. An Investment Imperative
      3. Demand for ESG and Gender-Based Data
      4. Methodology: Measuring the Gender Ecosystem
      5. Setting New Standards for Gender Equality
      6. Financial Performanceandthe Way Forward
      7. Notes
    10. Fiduciary Robo-Selection is Possible in a New Fund Order
      1. Notes
  8. 5: Blockchain Applications in Asset and Wealth Management
    1. Cryptocurrencies and Blockchain
      1. What is “Cryptocurrency”?
      2. What is an “Asset-Based Cryptocurrency”?
      3. How is an Asset-Based Cryptocurrency Created?
      4. Network Services
      5. The Network Platform
      6. The Wallet
      7. The Block Explorer
      8. Asset Supporters
      9. Market Opportunities
      10. Community Building
      11. Regulatory Concerns
      12. Token Exchange
      13. Security Mention
      14. Redemption Logistics
      15. Reconciliation of Value
      16. Conclusion
    2. How Blockchain Drives Innovation in Asset Management
      1. Challenges and Opportunities
      2. New Business Model
      3. Ecosystem of Blockchains
      4. Adoption Stage
      5. New Revenue Opportunities
      6. Potential Disruptor
      7. Exciting Times Ahead
      8. Notes
    3. Use Cases and Monetization Challenges of Blockchain Applications in Wealth Management
      1. Digital Disruption in Finance via Blockchain Technology
      2. Trust and Safety – A More Detailed Look at WM-Specific Use Cases
      3. Challenges for Implementation and Monetization
      4. Conclusion and Way Forward
      5. Notes
    4. Blockchain as a Backbone to Asset and Wealth Creation
      1. Blockchain
      2. Applications in Asset and Wealth Management
      3. Blockchain as a Backbone
      4. Blockchain Market Opportunities
    5. Dreaming of a Ledger-Free, Globally Connected Wealth Management Industry
      1. What is Roboblock?
      2. Differentiating Roboblock From Other Distribution Models
      3. Setting Up a Roboblock Network
      4. Conclusion
    6. Trust Arbitrage and the Future of the Wealth Manager – How Blockchain Innovations Can Crack the Code
      1. Founding Fathers Ring the Death Knell for Autocracy with a Pen
      2. The Story of the Firm, as Told by Economists
      3. Blockchain Innovations Can Make the Firm Feel the Pain
      4. Wealth Managers are Especially Vulnerable to – and Benefit from – Trust Arbitrage
      5. Smaller Wealth Managers are Getting a Raw Deal
      6. What If…
      7. Predictions are Difficult, Especially About the Future
      8. Notes
    7. Investment and Issuance Distributed in Blockchain
      1. Current State of Securities Practice with Pain Points
      2. Future State of Securities Practice with Blockchain
      3. Conclusion
  9. 6: Founders’ Success Stories
    1. Launching MeDirect Bank as a Challenger Bank
      1. A Good Product and Service at a Competitive Price
      2. Partial (Re-)Bundling
      3. Testing and Pivoting
      4. Growth!
      5. Client Centricity
    2. Empowering Women Financially – The Why and the How
      1. Why is it Important to Empower Women Financially?
      2. Empowering Women Financially: How?
      3. Notes
    3. Why I Left Goldman Sachs for FinTech
    4. Moneymeets.com – Germany’s Leading Personal Finance Management Portal
      1. Digitization Redefines the Rules of the Game
      2. How Two Bankers Became the Founders of a WealthTech
      3. Wealth Management with Moneymeets
      4. Working with Regulators
      5. How to Scale a Successful Team
      6. Finding “Good” Investors
      7. WealthTech Market Germany – A Small Excursion
    5. The 100 Trillion Dollar Market Failure
      1. It’s Time for a Rating Platform
      2. This Leads Us to the Question: What Do Investment Advisors and Fund Selectors Have in Common?
  10. 7: Enterprise Innovation
    1. Just Do It! Using the Buzz Around Innovation to Empower Banks and Asset Managers
      1. Always Strive to Generate Buzz When Promoting Your Idea Internally
      2. Execution is the Real Game
      3. Summary
    2. Leveraging Corporate Innovation by Opening Banks to External Ecosystems
      1. Definition of the Term WealthTech
      2. Insight: The First Robo-Advisor by a Major German Bank
      3. Corporate Innovation Accelerator as an Instrument to Enrich the Bank’s Innovation Potential
      4. Paradigms for a Beneficial Cooperation within a Corporate Innovation Accelerator
      5. The Need for Technical Interoperability within the Digital Banking Environment
      6. Intrapreneurship as an Option for Accelerating Corporate Innovation Potential from Within
      7. Conclusion
    3. Wealth Management is Dead, Long Live Wealth Management
      1. WealthTech Start-Up Collaboration Models
      2. Blueprint for WealthTech Start-Up Collaboration
      3. Future of Wealth Management in the Digital Age
      4. Notes
  11. 8: Global Overview of WealthTech
    1. Is the Future of WealthTech Already in China?
      1. China, the Largest FinTech Market in the World
      2. BAT Giant Tech Players Continue Growth by Moving to Other Markets Such as Banking
      3. Tech Companies Also Emerge with Specific Value Propositions
      4. Traditional Banks are Developing FinTech Solutions In-House or are Acquiring Them
      5. The Future of Chinese FinTech
      6. Notes
    2. WealthTech in Latin America
      1. What We Expect for the Evolution of FinTech and WealthTech in Latam
      2. Why We Believe There is a Different Evolution of FinTech Activity in the Region
      3. The Opportunity: To Grow Wealth We Need to Grow Financial Literacy First
    3. Challenges in the Japanese Wealth Management Market – Digital Issuance and Distribution of Japanese Real-Estate Securitized Products
      1. Japanese Financial and Real-Estate Securitization Markets
      2. WealthTech Provides Solutions for Japan
      3. Notes
    4. How to Unlock WealthTech in Turkey
      1. Notes
  12. 9: What is the Future of WealthTech?
    1. The Networked Client
      1. Notes
    2. The Investment Managers of the Future are Going to be Millennials
      1. Information Overload
      2. Mobile and Mobility
      3. User Experience and Digital Utility
      4. Artificial Intelligence, Analytics and Big Data
      5. Notes
    3. Empowering Asset Owners and the Buy Side
      1. The Sell Side’s Reaction to the New Era
      2. Rest-of-Market Positioning in the New Era
      3. Conclusion
      4. Notes
    4. An Industry Driven by Digital, Data and Artificial Intelligence
      1. The Old Guard
      2. Current Market and Innovation
      3. The Future Will be an Industry That is Digital
      4. The Coming Shifts
      5. The 21st-Century Asset and Wealth Manager
      6. New Opportunities and the Future
      7. Notes
    5. WealthTech – Taking Private Banking and Wealth Management Digital
      1. The Analogue Castle of Wealth Management is Under Siege
      2. Clients Request Tailored Solutions and “Bring Back the Fun”
      3. Understanding the Relevant Technologies for WealthTech
      4. Barbarians at the Gate? – The Forces of Disruption
      5. Act Now: Strategic “Ways to Play” in WealthTech
      6. How to Win in “High-Tech/ High-Touch”?
      7. Final Remarks and Outlook
      8. Notes
    6. The Wealth Management Canvas – A Framework for Designing the WealthTech Firm of the Future
      1. The Wealth Management Canvas
      2. Avoiding Pitfalls Through Validation
      3. Designing the Business Model of RoboRebalance
      4. Concluding Remarks
      5. Notes
    7. The Ingredients of IKEA’s Approach for a Starry Wealth Management – Choose to Change the Competitive Arena in a Mature Sector
      1. Stripping Out the Basic Elements
      2. Do It Yourself and Education
      3. Pricing
      4. Quality, Sustainability and Risks
      5. Credibility and Trust
      6. Conclusions
    8. FinTech and the Wealth Management Challenge
      1. The Promise
      2. Disintermediation – Always Unpredictable
      3. Obstacles Facing WealthTech
      4. Fintech and the Next Financial Crisis
      5. Risk of Information Overload
      6. When Tech Generations Collide
    9. Cognitive Decision-Making with “Insights-as-a-Service”
      1. How Could This Work in Practice?
      2. Why Knowledge Digitization Will be a Norm in Investment Management
    10. More Banking for Less Money
      1. Back to the Future
      2. ETFs Blaze the Trail
      3. Pure Democratization
      4. Undreamed-of Possibilities
    11. How AI Will Cause Robo-Advice to Completely Outperform Human Advice
      1. What AI Is and Why You Should Care
      2. Real Advice – Combining Plans with Execution
      3. New Powerful Tools in the Portfolio Manager’s Arsenal
      4. Autonomous Execution
      5. Explaining the Markets
      6. Talking with Robots
      7. Decreasing Customer Churn with Behavioural Analysis
      8. Summary
      9. Notes
    12. Security in the Future of WealthTech
      1. The General FinTech Challenge
      2. The Technology Security Concern
      3. The Human Capital Security Risk
      4. The Regulation Security Risk
      5. Conclusion
    13. How China is Shaping WealthTech and the Future of Financial Services
      1. The Wealth Management Opportunity in China: From HNWIs to the Mass Affluent
      2. The Chinese Tech Dragons
      3. Established Chinese FinTechs
      4. Why So Successful?
      5. Can the Same Happen in the West?
      6. Is Data the Differentiator?
      7. Conclusion
      8. Notes
    14. From the Technological to the Financial Singularity – A Journey Without Return to the Future of Finance
      1. The Artificial Intelligence Super Explosion
      2. When AIs Rule the Markets: The Financial Singularity
      3. AI in Wealth Management
      4. The Rise of the Financial Events Horizon
      5. Notes
    15. Welcoming the 2058 Class of the “Galactic Academy of Wealth Management”
      1. Notes
  13. List of Contributors
  14. Index
  15. EULA

Product information

  • Title: The WEALTHTECH Book
  • Author(s): Susanne Chishti, Thomas Puschmann
  • Release date: July 2018
  • Publisher(s): Wiley
  • ISBN: 9781119362159