Chapter 25: Age Of Discovery: Navigating the Balance Between Human and Machine

With the pace of change accelerating in the world around us, technology has ramped up competition. The emergence of innovative technology-enabled business models constantly forces incumbent financial institutions to clarify their strategies, to develop new capabilities and to transform their cultures. The asset and wealth management industry is thus being pushed towards a ‘disruptive’ advancement.

New tools such as screeners, tech chart analysis, opportunities for high frequency trading and research-based advice support active trading. If the client is correctly positioned in a risk suitability model, automated advice can be generated.

FinTech as “a new financial industry that applies technology to improve financial activities” (Schueffel, 2016, p. 45) is built upon distributed models in terms of bringing technology closer and allowing the development of new services, encouraging customer value and centricity. FinTech brings along an entirely different logic that is causing fundamental changes in the structure and purpose of business. It introduces changes that the majority of incumbents are still not ready to face. In this frame of reference, the impact of WealthTech as a subset of FinTech is primarily seen in finding new ways of meeting changing customer needs with new offerings by better understanding customers’ behavior and expectations, and therefore incumbents are looking for new ways to partner for innovation.