The WEALTHTECH Book The FinTech Handbook for Investors, Entrepreneurs and Finance Visionaries

Get a handle on disruption, innovation and opportunity in investment technology

The digital evolution is enabling the creation of sophisticated software solutions that make money management more accessible, affordable and eponymous. Full automation is attractive to investors at an early stage of wealth accumulation, but hybrid models are of interest to investors who control larger amounts of wealth, particularly those who have enough wealth to be able to efficiently diversify their holdings. Investors can now outperform their benchmarks more easily using the latest tech tools.

The WEALTHTECH Book is the only comprehensive guide of its kind to the disruption, innovation and opportunity in technology in the investment management sector. It is an invaluable source of information for entrepreneurs, innovators, investors, insurers, analysts and consultants working in or interested in investing in this space.

•    Explains how the wealth management sector is being affected by competition from low-cost robo-advisors

•    Explores technology and start-up company disruption and how to delight customers while managing their assets

•    Explains how to achieve better returns using the latest fintech innovation

•    Includes inspirational success stories and new business models

•    Details overall market dynamics

The WealthTech Book is essential reading for investment and fund managers, asset allocators, family offices, hedge, venture capital and private equity funds and entrepreneurs and start-ups.

SUSANNE CHISHTI is the Founder and CEO of FINTECH Circle and the FINTECH Circle Institute, the leading peer-to-peer learning platform providing in-person and online courses across fintech enterprise innovation, WealthTech, InsurTech, artificial intelligence and blockchain applications in finance, crypto-currencies and startup methodologies. As Co-Editor of the global Bestseller The FinTech Book, she has been selected as a "City Innovator – Inspirational Woman" after working for 15 years across Deutsche Bank, Lloyds Banking Group, Morgan Stanley Investment Management and Accenture in London and Hong Kong.

THOMAS PUSCHMANN is Founder and Director of the Swiss FinTech Innovation Lab at the University of Zurich and member of the Swiss Innovation Council Innosuisse. Before his current position, Thomas was heading a large international financial services research project at the Universities of St. Gallen and Leipzig and was a visiting scholar at the MIT Sloan School of Management. He is an advisor for many strategic national and international initiatives and an advisory board member of various institutions.

Preface  viii

About the Editors  xi

Acknowledgements  xiii

1. Introduction

The Augmented Investment Management Industry 7

FinTech Disruption Across the Wealth Management Value Chain – Will FinTech Dominate the Wealth Management Model of the Future or is there Still a Place for Traditional Wealth Managers? 11

Embracing Emerging Technology 16

WealthTech – Business as Unusual 19

Welcoming an Artificial Intelligence Robot as a Colleague 23

Essential Digitization in Wealth Management 28

Becoming Millennial-Minded is Key for WealthTech 31

“To Infinity and Beyond!” – Building WealthTech Applications has Never Been Easier 34

2. Digitizing Client Advisory and Robo-Advisors

Ten Reasons Why Digital Wealth Management Will Become a Worldwide Market Standard 42

What Do Wealthy Clients Think About Digital Wealth Management? 45

Challenges of Digitizing Wealth Management Advisory 50

The Hybrid Advice Model 53

No “One Size Fits All” – Personalized Client Service and Social Selling in Wealth Management 57

How to Give “Sleep-Tight” Robo-Advice 62

How Gamification Can Attract Consumers to Sign Up 65

The Counter-intuitive Reality of Robo-Advice Demographics 68

How Emerging Technologies Will Change Emerging Markets – Welcome Robo-Advisor X.0! 71

Presentation Technology – Enriching the Client Experience in a Physical and Virtual World 74

Digital Super Powers – The Role of Artificial Intelligence in Wealth Management 77

Using Artificial Intelligence in Wealth Management 80

Digital Asset Management in 2020 – Seven Theses 83

Making Digital Advice Personal is as Important as Making Personal Advice Digital 86

3. Digitizing Wealth Management Operations

Digital Business Model for Wealth Management Operations as Matchmaker of Generations 94

How a Digital Architecture Can Lead to Tangible Business Results 97

The Personalization Pillar 101

Digitizing Wealth Management 105

Survival of the Fittest – Cyber Resilience 108

4. Digital Platforms, Products and Ecosystems

Wealth Management-as-a-Platform – The New Business Architecture with PSD2 116

Wealth Management – Preparing for a Digital Revolution 120

How to Digitalize Wealth Management at Banks 123

Key Success Factors in Gaining Market Share and Scale in Alternative Lending 127

Personal Financial Intelligence – AI and the Future of Money Management 132

Financial Forecasting and Portfolio Optimization in the 21st Century 135

AI-Powered Wealth Management Products and Investment Vehicles 138

Wealth Managers Can Deliver Effective Client Outcomes with a Data-Driven Investment Process 142

The Business Case for Gender Equality 147

Fiduciary Robo-Selection is Possible in a New Fund Order 151

5. Blockchain Applications in Asset and Wealth Management

Cryptocurrencies and Blockchain 158

How Blockchain Drives Innovation in Asset Management 162

Use Cases and Monetization Challenges of Blockchain Applications in Wealth Management 166

Blockchain as a Backbone to Asset and Wealth Creation 170

Dreaming of a Ledger-Free, Globally Connected Wealth Management Industry 173

Trust Arbitrage and the Future of the Wealth Manager – How Blockchain Innovations Can Crack the Code 177

Investment and Issuance Distributed in Blockchain 181

6. Founders’ Success Stories

Launching MeDirect Bank as a Challenger Bank 190

Empowering Women Financially – The Why and the How 194

Why I Left Goldman Sachs for FinTech 197

Moneymeets.com – Germany’s Leading Personal Finance Management Portal 199

The 100 Trillion Dollar Market Failure 203

7. Enterprise Innovation

Just Do It! Using the Buzz Around Innovation to Empower Banks and Asset Managers 210

Leveraging Corporate Innovation by Opening Banks to External Ecosystems 213

Wealth Management is Dead, Long Live Wealth Management 216

8. Global Overview of WealthTech

Is the Future of WealthTech Already in China? 224

WealthTech in Latin America 227

Challenges in the Japanese Wealth Management Market – Digital Issuance and Distribution of Japanese Real-Estate Securitized Products 231

How to Unlock WealthTech in Turkey 234

9. What is the Future of WealthTech?

The Networked Client 244

The Investment Managers of the Future are Going to be Millennials 247

Empowering Asset Owners and the Buy Side 251

An Industry Driven by Digital, Data and Artificial Intelligence 254

WealthTech – Taking Private Banking and Wealth Management Digital 257

The Wealth Management Canvas – A Framework for Designing the WealthTech Firm of the Future 260

The Ingredients of IKEA’s Approach for a Starry Wealth Management – Choose to Change the Competitive Arena in a Mature Sector 264

FinTech and the Wealth Management Challenge 267

Cognitive Decision-Making with “Insights-as-a-Service” 271

More Banking for Less Money 273

How AI Will Cause Robo-Advice to Completely Outperform Human Advice 275

Security in the Future of WealthTech 279

How China is Shaping WealthTech and the Future of Financial Services 282

From the Technological to the Financial Singularity – A Journey Without Return to the Future of Finance 285

Welcoming the 2058 Class of the “Galactic Academy of Wealth Management” 289

List of Contributors 292

Index 309

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