Summer doldrums give analysts inspiration to reflect on what’s hot—no pun intended—in the wealth management marketplace. FinovateSpring 2016 took place May 10th and 11th and certainly provided fodder and put some firms on the map and—since then—was the catalyst for a deeper dive into what wealth management startups and incumbents are up to these days. Yes, the robo-advisor trend continues to attract a few new entrants. The robo-advisor debutantes tout variations of the standard robo-models, with one robo-firm (WorthFM) catering to the needs of women, and one (MeetInvest) offering investor portfolios built using stocks—not ETFs—and the investing rationale of famous investors—not preset algorithms that tend to be generic after accounting for risk preferences. There are also firms (Kore, Comarch) looking to push out intelligent assistants as an inexpensive way to interact with mass-market clients through the use of libraries and algos that address common questions and concerns while replying via text as a human agent.
What I can characterize as bigger themes unfolding include three areas with heavy digital components:
- Big-data analytics: It’s time for the wealth management space to move beyond storing big data efficiently and to actively extract meaning from big data. The new goals are to identify more efficiently the high-value investors/clients, do a better job identifying their needs almost in real time, and anticipate behaviors such as potential attrition based on life changes or influence from their social network. Sophisticated algorithms and computing, plus subject-matter expertise, make this a cutting-edge area of research for wealth management going forward. Companies with solutions in this space include:
- IBM (Client Insight for WM): While a far cry from a startup, IBM has a Watson-powered, wealth management-focused team whose prebuilt solutions offer deep client insights to improve client service, retention, and profitability. Through the use of cognitive solutions and advanced analytics that pull from a variety of data sources, IBM’s front end helps advisors manage their time efficiently, identifying clients at risk of attrition and getting extra help to offer customized client care.
- NIIT Technologies (Digital Foresight): Atlanta-based NIIT Technologies (2004) also uses, like IBM, a tool that lets financial firms predict client defection using customer data and a multitude of external data. Besides loyalty analytics, the forecasting use cases include prospecting assistance, fraud detection and prevention, and creating behavioral scorecards for loyalty analytics.
- Flybits: Silicon Valley-based Flybits (2013) gives app developers and mobile marketers unprecedented ways to deliver particular messages or calls to action. The end result is that a Flybits-powered financial institution can choose to deliver messages when the client or prospect is in a particular setting and is most likely to respond positively to the message. Flybits tracks the recipient’s calendar activity, language, age, gender, prevailing weather, and personal interests to optimize message delivery.
- Other firms: Other attractive firms in this space include CMRNext, Fintonic, Quid, and Ephesoft.
- Digital authentication: As the market becomes increasingly digital, WM firms feel an added responsibility to safeguard client data and meet elevated data privacy concerns across the firm’s omnichannel digital delivery strategy. In the face of increased cases of identity theft and malicious use of client information across platforms, a group of firms are coming to the fore to help wealth management firms meet their digital authentication challenges: client onboarding, Know Your Customer, anti-money laundering, robo-threat, and cases of usurped identity. Vendors in this group include ThreatMatrix, OneVisage, Mitek, ChipShield, and Civic.
- Rich digital engagement: One of the most eye-catching areas of development involves the use of rich digital engagement. This technology being deployed starts with a simple phone call or accessing a website to enter a content-rich, interactive, much more engaging and customized experience. Three firms have made inroads in this space:
- CallVU: Israel-based CallVU (2012), as its name suggests, lets callers view their information displayed as they are on hold. Clients can interact with an agent, for example, by viewing in real time the same image displayed from the agent screen. The blending of interactive visual content with voice calls creates an engaging, collaborative, and more efficient customer experience.
- SaleMove: New York-based SaleMove (2012) boosts financial firms’ prospect conversion and client engagement through tools that let front-line agents from call centers or advisors interact in real time with prospects and clients via text, voice, and one-way/two-way video, including the ability to cobrowse with the client or prospect and access third-party websites.
- Comarch: Based in Poland (1993), Comarch is one of the leading technology development firms in Eastern Europe. Its wealth management front end is made for mobile and combines financial planning and investment advisory with virtual reality from relationship managers.
We’re looking forward to the next Finovate event: FinovateFall in New York, September 8 and 9, 2016.
Register here and enter promo code Aite20 to receive a 20% discount off your conference ticket.
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