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Advancements in technology have truly changed the way that we live our lives. Before we still had to wait at least a month for letters to arrive; now, emails reach the recipient the moment the Send button is clicked. Before we had to visit supermarkets to buy groceries and other stuff that we need; now, all we have to do is click and swipe, and a package full of groceries can be sent right to our doorstep.
Technological changes are rampant in wealth management as well. There is a misconception that only younger rich people would want access to technologies that revolutionise wealth management. The truth of the matter is that even those who belong to the older cohort want to use advanced technologies when dealing with their wealth.
In this article, we present three of the most promising fintech trends for 2019.
Hybrid of Automated and Human Financial Advising
Relying on algorithms, artificial intelligence (AI) units are able to make good investment choices. In fact, there are reports that the advice given by these “robo-advisors” yielded good two-year returns.
While this looks and sounds good on record, the wealthy still have reservations when it comes to entrusting the future of their money solely to a pre-programmed software. As a response, wealth management firms adopted the hybrid approach: they now offer human financial advisors who have access to AI. The AI programme takes care of the complex calculations, making sure that the whole portfolio is within tolerable risk levels. The financial advisor covers the more delicate and personalised customer service.
Doing it this way makes it possible for clients to take advantage of the complexities of AI and be comforted in the fact that a totally rational and feeling human is actually working for them.
Mobile Wealth Management
More and more business entities are going online today. The bookseller, electronic distributor, and even the caterer is now taking advantage of online platforms to widen their reach.
Similarly, fintech has also found a way for wealth management services to be made mobile. There are now programmes that make it possible for clients to contact their advisors through apps. This makes the job of the advisor more of an on-call type, and not everyone might like this setup. But failure to adapt puts them at risk of being viewed as backward-thinking, and therefore unreliable.
In 2018, a new fintech breakthrough was developed in silence. Dubbed open banking, this initiative is backed by the government and is particularly aimed at providing clients the ability to generate more useful insight just by looking at their financial data. An open banking system allows a client to collate his financial data in one place. Of course, the banks that provide the data must be given explicit permission to do so.
This technology is still being refined, and it is said that it will only reach its most effective and efficient if banks and fintech startups are able to collaborate more meaningfully.
If you are a high net-worth individual, knowing the trends in fintech is going to be beneficial for you. By studying them closely, you’ll be better able to make the right investment decisions and give more precise directions to your financial advisors.