WealthTech Robo Rumble: Human vs Robot
As the Wealth & Asset Management Platform business continues to grow and accelerate across Europe in 2018 what are now becoming the next challenges for the sector and is this sustainable?
Assets under administration on platform are almost €2.5 trillion as at end of 2017, this continues into 2018.
The traditional platform business is also being challenged from various angles predominantly Digitally based. To remain relevant, platforms will act as WealthTech enablers and data hubs.
Large Wealth Managers such as Invesco are acquiring WealthTech companies such as Intelliflo and JemStep to get closer to know a lot more about what investments advisers’ clients are holding, buying and selling and also to enables automated services for financial advisers.
Robo propositions make up the fastest-growing segment of the direct to consumer market in the UK and across Europe they now manage over €10bn. Although Automation and Robo advice has challenges itself. Are investors ready to Trust a machine to invest their money and what regulatory challenges are coming as the FCA is summoned to review Automated advice from the Work and Pensions committee? A recent report stated that only 18% of European investors are open to using pure robo-advice. However, this almost triples when some sort of human advice is also available.
Technology has its inherent risks and problems, taking TSB recent problems as a case in point. Companies try to do the right thing through service and responsibility but this is forgotten if the service isn’t there. Companies are so reliant on technology now and customers talk about the importance of personal service, face-to-face contact and physical branches. But customers expect an easy to use and reliable digital interface. Both Technology and a Human touch are needed,
The entire wealth space is also in the midst of a technology upgrade. Companies have to choose between the ‘frying pan’ of replatforming, which comes with eye-watering costs and all sorts of risks, and the ‘fire’ of technological obsolescence, with its margin-killing inefficiencies and unmarketable consumer-facing functionality.
However, ultimately there is only one direction that the industry is heading in with AI, Automation, and Digital Platforming. Digital transformation is inevitable whether that’s in terms of technology, products or propositions.
Avoiding the TSB scenario is much more easily said than done but doing the homework is a good place to start.
Streamline can support WM and Platform Technology businesses in their Digital Transformation with sector-specific networks built over 15 years to provide the right resource and staffing solutions at the right time. www.screc.co.uk