Listen to PwC's Julien Courbe and Michael Raneri discuss how FinTech is shaping the asset and wealth management industry, and what new industry trends asset managers need to consider.
All financial sector survey participants viewed asset and wealth management as the third most likely sector to be disrupted. From a wider perspective, customer banking and fund transfer & payments industries offer palpable examples of how FinTechs are changing the financial sector with new offerings. They rank top among sectors most prone to the FinTech disruption, and are already visibly disturbed. Asset and wealth managers are next in line to experience the game-changing impact that start-ups will have on the financial industry.
A vast majority of asset and wealth managers (75%) view the impact of FinTech predominantly as the need to adapt to changing customer needs, while 50% (more than any other financial sector) think new entrants can enhance interactions and help build trusted relationships (figure 3). Firms do not, however, prioritise these types of investments, preferring instead to focus on investments around analytics and automatic asset allocation.
While sceptical, asset and wealth managers are still investing in new technologies. They believe that FinTechs have the biggest potential to improve customer experience, but most of their actual interest is focused on data analytics and automation of asset allocation, areas typically associated with “robo-advisors”.
Only 45% of AWMs agree that they place FinTech at the heart of their strategy, while the majority admit that their FinTech-focused strategy is being only partially adopted. This makes it difficult for incumbents to understand and take advantage of trending FinTech developments that are reshaping the market.
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