• March
  • 2021

Kidbrooke’s Summary of WealthTech Trends for The Fourth Quarter of 2020

First trend: Open Banking: Rethinking Customer Wealth Journeys.

The digital world favours personalisation over one-size-fits-all strategies, and wealth management firms work hard to create hyper-personalised experiences for their customers. FinTech Futures suggests that this degree of personalisation can be achieved by a deeper understanding of customers' financial situations and leveraging behavioural data. International Adviser identifies three additional factors that can help create personalised and frictionless user journeys: seamless user onboarding, easy account top up and withdrawal, and account aggregation.

We believe that more widespread account aggregation would prove to be the most disruptive of these three factors. As more financial institutions open their account information, custom experiences driven by digital financial planning tools become more comprehensive and powerful. In this context, digital analytical tools analysing a holistic picture of the customer's balance sheets would benefit both the retailers and HNWI-oriented businesses.

may execute their volume-based strategies more efficiently by reaching a larger number of customers with personalised analytics and actionable insights on their financial situations. The HNWI-oriented financial advisers can use digital tools to assess their customers' financial position more comprehensively. This strategy would deliver enhanced quality of service and super-human attention to detail that can become a fail-proof differentiating factor in the new reality.

Second trend: Sustainable Finance and WealthTech: Increased Adoption and Visibility

The Copenhagen Fintech Week 2020 has shown that the Nordic financial sector moved from asking 'why' consider sustainability to 'how' to approach it. The surge of interest in the sustainability agenda drives tech firms to expand their list of ESG-friendly products. Driven by a similar trend, wealth managers start looking into technological collaborations to enhance their ESG capabilities. Charles Schwab's Senior Vice President, Sara Tresch, emphasised that value-based investing is likely to become a necessary part of the sector's future. Additionally, Merrill Lynch's Head of Digital Wealth Management, Kabir Sethi, pointed out the immense power of ESG investing in addressing the clients' needs.

This year Kidbrooke joins the overarching sustainability trend by launching a joint research project with master students from the Stockholm School of Economics. The project focuses on the mechanism of how climate change scenarios impact the financial markets. The research insights will be integrated into our software, expanding the functionality of OutRank to consider various climate change scenarios. Kidbrooke strives for a world of educated financial decisions, and this opportunity is only the start of that transformation.

Third trend: Pandemic as a Catalyst for More Social Media Engagement Among Wealth Managers

LinkedIn remains to be the most popular social media among wealth managers in Europe. However, with increasing video content, YouTube starts to look more promising. International Investment reports that 73% of wealth managers expect to release more video content through social media over the next 12 to 24 months. Unlike written content, videos are more engaging and easier to understand. As suggested by Fabrizio Zumbo, the Associate Director of European Asset and Wealth Management Research at Cerulli, the financial advisors are likely to continue organising virtual conferences as face-to-face events might not be returning in 2021. The shift to social media is a good strategy for reaching the millennials: according to research by Word Stream, an online advertising platform, 84% of millennials do not trust traditional marketing strategies, such as cold calls or magazine ads. On the other hand, social media, such as Instagram, YouTube and Twitter, play a pivotal role in their lives, so these platforms might be the most exciting platforms for wealth managers to build a future presence.

Stay tuned for further announcements on our journey in our upcoming podcasts and webinars! Thanks for watching and check out our website! See you next quarter!

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