December 9, 2017
The WealthTech industry is one of the most promising areas attracting substantial funding, talent and, probably, the most active on events. Financial institutions are aggressively pushing boundaries in response to the rise of tech rivals. And for a good reason – the UK Government estimates that robo-advisory solutions can extend financial opportunities for 16 million people in the country.
WealthTech enables the provision of advice to mass-market segments, including those that have previously been unreached by financial advice. The FCA estimates that this could be as many as 16 million people in the UK alone. The industry has the opportunity to give millions of people better access to affordable financial advice that meets their needs at every stage of their lives.
FinTech innovations can also help asset managers reduce the number of intermediaries in an investment transaction, and therefore, bring down investment related costs. At present, some parts of the asset management industry rely heavily on companies that provide necessary intermediary services before making an investment transaction on clearing and settlement infrastructure. Disintermediation is the process of streamlining these intermediaries, making the system more efficient and transparent.
Domestically, FinTech firms have the opportunity to disrupt ways of doing business and bring down costs associated with making an investment to the benefit of the end-investor. One of the most notable emerging sub-sectors of FinTech is WealthTech. Focusing on enhancing wealth management and the retail investment process, WealthTech encompasses technologies derived from wealth management firms, research tools that generate investment solutions and platforms that support financial advisors. The most visible players in this FinTech sub-sector are online wealth managers, commonly known as robo-advisors.
In a patent awarded by the US Patent and Trademark Office on Tuesday, the second-largest bank in the US outlined a potential cryptocurrency exchange system that would convert one digital currency into another. This system would be automated, establishing the exchange rate between the two currencies based on external data feeds. The proposed system would collect data from external information sources on cryptocurrency exchange rates and use this data to establish its own optimal rate.
The patent notes this service would be for enterprise-level customers.
Enterprises may handle a large number of financial transactions on a daily basis. As technology advances, financial transactions involving cryptocurrency have become more common. For some enterprises, it may be desirable to exchange currencies and cryptocurrencies.
The proposed system could also evaluate transactions for potential illicit trades, calculating a risk score based on the amount of cryptocurrency being transferred and any other information available, according to the patent.
Real, practical AI is much more than a few plug-and-play algorithms. It requires a sound strategy around desired business outcomes, targeted use cases, data assets, algorithms, high-scale computing, process integration, change management, incentive alignment, executive support, and accountability. Winners will make big bets, forging partnerships with experts in AI-driven business impact along with fostering system modernization to drive measurable, predictable and repeatable business value.
Advances in APIs are making it possible to plug in customer-specific intelligence across your entire tech stack, whether it’s the latest technology or the green screen that’s been on the shop floor for the past 30 years. Using AI to supercharge sales channels can also influence the channel mix. Delivering intelligence at all customer touch points means that customers have a consumer-like buying experience when they need to self-serve and an informed expert to speak with when they need it, too. Company leaders can easily pivot that mix, knowing that the AI-driven tech will continually serve up actionable intelligence, regardless of the channel.