“The WealthTech Book gives in depth and valuable insights about the transformation of the wealth management industry. By showcasing several examples of new digital solutions and technology driven changes the book and its renowned authors deep dive into the subject.”
Marc P. Bernegger, Fintech- and Crypto-Entrepreneur and Investor
“Like most other industries, the banking industry has had to deal with digitization, disruptive innovations and regulatory changes during the last years. New players entered the market, which facilitated the simplification of products and processes in this customer centric business field. In this constantly changing environment it’s easy to lose track of the current trends of state-of-the-art, cutting-edge technology.
Asset management has not been exempted from these disruptive ongoing trends. Robo-advisory even though still unclear in which ways it will add-value to customers will undoubtedly garner much attention. The WealthTech Book provides a great insight on the ongoing changes in the financial industry, especially on the topics of Wealth Management, Digital Platforms, Ecosystems, Blockchain and many more.”
Dr Peter Bosek, Chief Retail Officer, Erste Group AG
“FinTech has the potential to significantly alter the financial landscape, enabling financial inclusion and lifting wealth management to a new level. This book provides an in-depth overview of the multiple facets how FinTech will change wealth management – a valuable guide to professionals, regulators, and everyone interested in the future of finance.”
Prof. Dr Markus Brunnermeier, Director Bendheim Center
for Finance, Princeton University
“The wealth management industry has reached a turning point fuelled by new technologies and greater access to information for both traditional and new investors. The industry is now challenged with searching far and wide for alpha in an increasingly regulated world – while also managing the complexities that come with better informed and empowered investors. This convergence has led to some of the most innovative investment solutions and services seen in decades. It has also set the stage for the next turning point: the gradual transference of wealth from baby boomers to digital-savvy millennials.”
David Craig, President, Financial and Risk, Thomson Reuters
“Everybody talks about Blockchain and Artificial Intelligence, but very few people know how to implement these solutions in financial services. The WealthTech Book is the ultimate toolkit showing you how the latest technologies can be applied to benefit investors, entrepreneurs, retail and institutional clients worldwide. The directory at the end is invaluable – a little ‘black book’ of the leading FinTech and WealthTech thought-leaders globally. Every investor should have it on his/her bedside table.”
John Davies, CEO, Just Loans Group PLC and Chairman,
Kompli-Global Ltd
“Wealth management is at the dawn of a huge revolution: digitization is changing the customer journey value chain and business models of modern wealth management. The crowdsourced book tells you why and how the change will happen.”
Prof. Dr Oliver Gassmann, Director, Institute of
Technology Management, University of St. Gallen
“This book is the first of its kind to give a comprehensive overview on the future developments in this evolving field. WealthTech is of highest relevance for SIX which combines expertise at the intersection of financial services and technology by providing securities trading, clearing and settlement, as well as financial information and payment transactions. Our owners which consist of financial institutions rely on us to provide them with innovative solutions in the field of WealthTech as well as FinTech and RegTech.”
Dr Romeo Lacher, Chairman of the Board of Directors, SIX Group
“Investing globally provides huge opportunities. The WealthTech Book shows investors how to use big data and AI to achieve alpha. It provides deep insights on how technology will impact the global asset management and private banking sector. I would like to thank Susanne Chishti for her insightful initiative. The post digital revolution world will be formed by decisions made today. As a robotics and blockchain friendly investor, I know that the first thing before investing is to have an extensive knowledge of the ecosystem. The WealthTech Book could be an invaluable guide to access these new and upcoming investment opportunities.”
Alice Lhabouz, President, Trecento Asset Management
“In the first book, the authors provided a broad view of FinTech to provide readers with an in-depth study of the interplay between finance and technology, as well as the trends across the FinTech spectrum. In this follow-up book, the authors have built on that firm foundation taken a deeper dive into the wealth sector of the FinTech spectrum. In doing so, the authors have once again provided new and returning readers a pragmatic and insightful look into how AI, Blockchain and other key technologies will lower the barrier of investment and make wealth generation much more accessible to a wider pool of consumers globally. Definitely a relevant read for both experienced and novice FinTech practitioners!”
Robin Loh, Chief Digital Officer, Allianz Asia Pacific
“Following vast disruption in the retail and ecommerce space, the wealth/asset management and private banking industry is facing its own ‘Uber moment’. Staying abreast of new trends and technologies – which span well beyond the use of artificial intelligence in ‘robo-advice’ – is going to be a challenge. The WealthTech Book, crowd-sourced from industry experts and thought leaders in digital disruption, is a valuable tool for industry players looking to stay relevant in this fast-changing environment.”
Joy Macknight, Deputy Editor, The Banker
“What if? The single, repetitive question every innovator, every entrepreneur, every policy maker asks themselves. What if there was another way, a better way, a new way? Well, what if this book not only opened your mind, but it also helped expanded and accelerated your potential? I believe it will. Whether you work in the sector, consume from it, supply to it, aspire to be part of it, I encourage you to invest in yourself, digest the book, and join the conversation. Make your mark. Ask yourself what if?”
Simon Paris, Deputy CEO, FINASTRA
“You’ve done it again! On the heels of The FinTech Book, a global best seller across 107 countries, The WealthTech Book is another outstanding compilation of excellent and actionable content. It provides a very useful and detailed summary of important issues impacting the wealth management industry. Whether you are a start-up or an incumbent leveraging new technology to create new and/or better wealth management products, services and delivery, this book is a must read. I recommend it with alacrity.”
R. Todd Ruppert, retired CEO, T. Rowe Price Global Investment Services;
venture partner, Greenspring Associates; senior advisor SenaHill Partners
and Motive Partners; serial FinTech investor and advisor
“Following the success of Susanne’s previous curated works in The FinTech Book comes The WealthTech Book. This is an important development as it demonstrates the granularity of how technology is attacking all of the structures of finance from retail banking and payments to commercial, investment and private banking to insurance and wealth management. The WealthTech Book is a timely arrival to show the specifics of how technology is changing the world of big money and high-net-worth people. About time, as the new generation of technology billionaires don’t really want some sharp-suited person calling them all the time. Leave it to the apps!”
Chris Skinner, CEO, The Finanser Ltd
“I am very impressed by the way Susanne Chishti again collects all stakeholders of the industry and motivates them to share their thoughts on the future development of the industry. I like the structure of the book – cover all relevant topics and each exactly to the point. For a traditional banker it offers a fast track to a new world.”
Dr Johann Strobl, CEO Raiffeisen Bank International
“The WealthTech Book is a must read as it provides an excellent overview of the trends, new technologies and reasons why the sector is transforming. Wealth Management will always fulfil a crucial role in consumers as it helps them give peace of mind on their financial future. Technology is creating a win–win for consumers and the sector allowing better net returns for investors and better RoE for those institutions timely adopting technology. Finding the balance between Tech and Human relationship and trust is what the next decade is about! Exciting times and an exciting read!”
Radboud Vlaar, Partner, Finch Capital (OGC)
Edited by
Susanne Chishti
Thomas Puschmann
This edition first published 2018
© 2018 FINTECH Circle Ltd
Registered office
John Wiley & Sons Ltd, The Atrium, Southern Gate, Chichester, West Sussex, PO19 8SQ, United Kingdom
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Library of Congress Cataloging-in-Publication Data
Names: Chishti, Susanne, editor. | Puschmann, Thomas, editor.
Title: The wealthtech book : the fintech handbook for investors, entrepreneurs and finance visionaries / edited by Susanne Chishti, Thomas Puschmann.
Description: Hoboken : Wiley, 2018. | Includes index. |
Identifiers: LCCN 2017056769 (print) | LCCN 2018006547 (ebook) | ISBN 9781119362180 (pdf) | ISBN 9781119362227 (epub) | ISBN 9781119362159 (paperback)
Subjects: LCSH: Investment analysis—Handbooks, manuals, etc. | BISAC: BUSINESS & ECONOMICS / Finance.
Classification: LCC HG4529 (ebook) | LCC HG4529 .W427 2018 (print) | DDC 332.63/2042—dc23
LC record available at https://lccn.loc.gov/2017056769
A catalogue record for this book is available from the British Library.
ISBN 978-1-119-36215-9 (paperback) ISBN 978-1-119-36218-0 (ePDF)
ISBN 978-1-119-36222-7 (ePub) ISBN 978-1-119-44451-0 (Obook)
With the development of digital wealth management (“WealthTech”), including robo-advisory platforms and virtual advice, the global investment management industry is facing huge disruption. In addition to successful digital wealth management solutions, customer preferences are changing and the millennial generation often prefers a “do it yourself” approach via apps instead of meeting a financial advisor in person. Considering that trillions of pounds will be inherited by this tech-inspired generation from their wealthy baby boomer parents, and the general trend that consumers are used to a great digital experience, most asset managers and private banks will need to closely review their product, distribution and marketing strategies over the next decade to stay in business.
In addition, the pressure to lower fees and achieve higher returns has allowed WealthTech solutions to shine, helping to generate higher alpha, reduce risk and significantly lower the costs of money management, financial planning and advice, while at the same time delighting their customers with a superior user experience.
Some emerging business models – such as robo-advisors – were initially focused on servicing customer segments which could not be serviced profitably by traditional players, before moving upstream and competing with incumbents. Other propositions are focused on empowering existing financial advisors and private bankers with the latest digital innovation and technologies, or supporting portfolio managers to fight information overload through solutions leveraging the latest artificial intelligence and big data analytics intelligence.
Overall, the WealthTech sector is booming globally, with FinTech entrepreneurs and investors across the world working on the most cutting-edge solutions. In order to share with our readers the best content globally, we have followed the same approach as with The FinTech Book – the first globally crowdsourced book on the financial technology revolution, which was published by Wiley in 2016 and has become a global bestseller.
The FinTech Book exceeded all our expectations: the book is available in five languages across 107 countries, as a paperback, e-book and audiobook. More than 160 authors from 27 countries submitted 189 abstracts to be part of the book. About 50% of all contributors were chosen to write for the final book. When we launched The FinTech Book across the world during 2016, our authors and readers had many opportunities to meet us in person, get their books signed at global book launch events and deepen their FinTech friendships worldwide.
In 2017 we decided to extend our FinTech book series by writing three new books on how new business models and technology innovation will change the global asset management and private banking sector (“WealthTech”), the insurance sector (“InsurTech”) and regulatory compliance (“RegTech”). We followed our approach of crowdsourcing the best experts, to give the most cutting-edge insight into the changes unfolding in our industry.
The WealthTech Book is the first global book on this subject – a book that provides food for thought to FinTech newbies, pioneers and well-seasoned experts alike. The reason that we decided to reach out to the global FinTech community in sourcing the book's contributors lies in the inherently fragmented nature of the field of financial technology applied to investment management, financial advisors and private banks globally. There was no single author, group of authors or indeed region in the world that could cover all the facets and nuances of WealthTech in an exhaustive manner. What is more, with a truly global contributor base, we not only stayed true to the spirit of FinTech and WealthTech, making use of technological channels of communication in reaching out to, selecting and reviewing our would-be contributors, but also made sure that every corner of the globe had the chance to have its say. Thus, we aimed to fulfil one of the most important purposes of The WealthTech Book, namely – to give a voice to those who would remain unheard, those who did not belong to a true FinTech community in their local areas, and spread that voice to an international audience. We have immensely enjoyed the journey of editing The WealthTech Book and sincerely hope that you will enjoy the journey of reading it at least as much.
More than 240 authors from 25 countries submitted 236 abstracts to be part of the book. We asked our global FinTech community for their views regarding which abstracts they would like to have fully expanded. Out of all the contributions, we selected the best and asked our selected authors to write the 71 chapters in this book. We conducted a questionnaire among all our selected authors to further understand their background and expertise. 80% of our authors have postgraduate university degrees and strong domain expertise across many fields; 74% of our final authors had had their articles published before. See Tables 1 and 2.
Table 1: What is the highest educational qualification of our authors?
Table 2: List of all areas our authors have domain expertise in (multiple choices possible)
Tables 3 and 4 show that more than 35% of our authors are entrepreneurs working for FinTech start-ups (many of them part of the founding team), 40% come from established financial and technology companies and another quarter from service providers such as consulting firms or law firms servicing the FinTech sector.
Table 3: The types of company our authors are working in
Table 4: The size of companies our authors work for
More than 25% of our authors work for start-ups with up to 5 people and another 28% for start-ups/SMEs (small and medium-sized enterprises) with up to 50 people. More than a quarter of our authors are employed by a large organization, with more than 1000 employees.
In summary, we are very proud of our highly qualified authors, their strong expertise and passion for FinTech, either being entrepreneurs or often “intrapreneurs” in large established organizations committed to playing a significant role in the global FinTech and WealthTech revolution. These remarkable people are willing to share their insights with all of us over the following pages.
This project would not have been possible without the dedication and efforts of all contributors to The WealthTech Book (both those who submitted their initial abstracts for consideration by the global FinTech community, and the final authors whose insights you will be reading shortly). In addition, we would like to thank our editors at Wiley, whose guidance and help made sure that what started off as an idea, became the book you are now holding in your hands.
Finally, I would like to thank my fantastic co-editor Thomas Puschmann, Head of the Swiss FinTech Innovation Lab. Editing a crowdsourced book naturally takes several months, and Thomas was always a pleasure to work with, given his strong domain expertise and vision for the future of WealthTech!
Susanne Chishti
Co-Founder, The FINTECH Book Series
CEO & Founder FINTECH Circle & the FINTECH Circle Institute
www.FINTECHCircle.com
(Twitter: www.twitter.com/SusanneChishti)
Susanne Chishti is the CEO of FINTECH Circle, Europe’s first Angel Network focused on FinTech opportunities and the founder of the FINTECH Circle Institute, the first global peer-to-peer FinTech learning platform to acquire FinTech and digital skills. She is co-editor of the bestselling title The FinTech Book, which has been translated into five languages and is sold across 107 countries. Susanne is recognized in the European Digital Financial Services “Power 50” 2015, an independent ranking of the most influential people in digital financial services in Europe. She has been selected as top 15 FINTECH UK Twitter influencer and as the UK’s “City Innovator – Inspirational Woman” 2016. Susanne is a FinTech TV commentator on CNBC and a guest lecturer on financial technology at the University of Cambridge.
After completing her MBA, she started her career working for a FinTech company (before the term “FinTech” was invented) in Silicon Valley, 20 years ago. She then worked for more than 15 years across Deutsche Bank, Lloyds Banking Group, Morgan Stanley and Accenture in London and Hong Kong. Susanne is an award-winning entrepreneur and investor, with strong FinTech expertise. She is a mentor, judge and coach at FinTech events and competitions such as SWIFT Innotribe and FinTech & InsurTech Startup Bootcamp. She is also a conference speaker at leading FinTech events globally.
FINTECH Circle is a global community of more than 100,000 FinTech entrepreneurs, investors and financial services professionals globally. FINTECH Circle’s advisory practice services clients including leading financial institutions such as BNP Paribas and the UK’s innovation agency NESTA, which appointed FINTECH Circle as partner for the £5 million Challenge Prize to work on Open Banking initiatives for SME banking in 2017.
Susanne is also a non-executive director of the Just Loans Group plc, Kompli-Global and Lenderwize Ltd.
FINTECH Circle (www.FINTECHCircle.com) is a global community of 100,000 FinTech entrepreneurs, angel and VC investors, financial services professionals and FinTech thought leaders, focusing on FinTech seed investing, education and enterprise innovation. FINTECH Circle’s CEO, Susanne Chishti, co-edited The FinTech Book published by Wiley, which became the first globally crowdsourced book on financial technology and a global bestseller across 107 countries in five languages.
Twitter: @FINTECHCircle
Instagram: @FINTECHCircle
About the FINTECH Circle Institute
The FINTECH Circle Institute (www.FINTECHCircleInstitute.com) is a peer-to-peer online learning platform, designed to empower finance professionals with the necessary digital skills to adapt to the rapidly changing industry. With board members ranging from traditional banks and FinTech experts through to academics from leading universities, the platform offers practical bitesize courses on topics including WealthTech/robo-banking, InsurTech, RegTech, blockchain, artificial intelligence, enterprise innovation and start-ups. Every quarter, new bitesize classes are released online to ensure that members have access to the latest FinTech insights and industry experts working on the most cutting-edge FinTech innovations globally.
Twitter: @FTC_Institute
Join our LinkedIn Group to share your FinTech knowledge and learn from others:
www.linkedin.com/groups/8184397
(Twitter: www.twitter.com/PuschmannThomas)
Thomas Puschmann has spent more than a decade at the nexus of technology and business. Currently, he is founder and director of the Swiss FinTech Innovation Lab at the University of Zurich and a member of the Swiss Innovation Council Innosuisse. In addition, Thomas is a senior advisor for many public and professional initiatives and projects. He is a founder of Swiss FinTech Innovations, an independent association of major Swiss financial institutions, a founder of the consulting firm FinTech Innovations and an advisory board member of the Center on Global Internet Finance. Lastly, he is a judge and mentor for several start-up competitions in Europe and Asia and a conference speaker.
Thomas holds a PhD in business administration with a specific focus on information systems from the University of St. Gallen and a master in management and information sciences. Before his current position he was heading a large international financial services research project from the Universities of St. Gallen and Leipzig where he was working on his postdoctoral lecture qualification. In addition, Thomas was a visiting scholar at the MIT Sloan School of Management and a member of the board at ESPRiT Consulting and The Information Management Group where he was responsible for business technology.
The Swiss FinTech Innovation Lab is a cross-disciplinary platform for education, research and entrepreneurship that involves researchers and practitioners from banking and finance, business informatics, innovation management, social sciences, economics, law and many other disciplines. The lab researches and teaches on the topic of the digitization in the financial services industry together with participants from the whole value chain, including banks, insurers, start-ups, service providers, regulators, and various other organizations and associations from the financial services ecosystem. It aims to create knowledge in this emerging field to improve and foster intra- and entrepreneurship. Hosted at the University of Zurich, the Swiss FinTech Innovation Lab cooperates with a broad international network of researchers and universities.
Web: www.swissfintechinnovationlab.ch
Twitter: www.twitter.com/PuschmannThomas
LinkedIn: www.linkedin.com/in/thomaspuschmann
After the global launch of The FinTech Book in 2016, we met thousands of FinTech entrepreneurs, investors and financial services professionals who all loved the book and wanted to learn more about how financial technology will change the global investment/wealth management sector and private banking.
We came up with the idea for The WealthTech Book, spoke to our FinTech friends globally and everybody supported the idea. FinTech entrepreneurs across all continents were eager to share their powerful insights. They wanted to explain the new business models and technologies they were working on to change the world of finance. FinTech investors, “intrapreneurs”, innovation leaders at leading financial institutions and thought leaders were keen to describe their embrace of the FinTech revolution across investment management and private banking. Finally, our WealthTech visionaries wanted to share their vision for the future.
The global effort of crowdsourcing such insights was born with The FinTech Book, which became a global bestseller across 107 countries in five languages. We built on this success with The WealthTech Book. We are aware that this would not have been possible without the FINTECH Circle global community, the Swiss FinTech Innovation Lab community and our own personal networks. We are very grateful to the almost 100,000 members of FINTECH Circle for joining us daily across our websites (www.FINTECHCircle.com, www.swissfintechinnovationlab.ch), our Twitter accounts and our LinkedIn groups. Without public support and the engagement of our global FinTech community, this book would not have been possible.
The authors you will read about have been chosen by our global FinTech community purely on merit – no matter how big or small their organization, no matter which country they work in, no matter if they are well known or still undiscovered, everybody had the same chance to apply and be part of The WealthTech Book. We are proud of that, as we believe that FinTech and WealthTech will fundamentally change the world of finance and asset management. The global FinTech and WealthTech community is made up of the smartest, most innovative and nicest people we know. Thank you for being part of our journey. It is difficult to name you all here, but you are all listed in the directory at the end of this book.
Our publisher, Wiley, has been a great partner for The FinTech Book and we are delighted that Wiley will again publish The WealthTech Book in paperback and e-book formats globally. Special thanks go to our fantastic editor, Gemma Valler. Thank you to you and your team – we could not have done it without your amazing support!
We look forward to hearing from you. Please visit our website www.WealthTECHBook.com for additional bonus content from our global WealthTech community! Please send us your comments on The WealthTech Book and let us know how you wish to be engaged by dropping us a line at learn@FINTECHCircle.com or thomas.puschmann@uzh.ch.
Susanne Chishti Thomas Puschmann
Twitter: @SusanneChishti Twitter: @PuschmannThomas
WealthTech can be narrowly defined as the technology/software used to help investors make better decisions when it comes to where they should put their money. In this book we define WealthTech much more widely as the impact that technology has on the global investment and wealth management industry, including private banking and asset management. WealthTech includes known business-to-consumer (B2C) models such as crowd-funding, alternative lending and robo-advisory.1 However, it also includes business-to-business (B2B) enterprise innovation and technologies in the areas of blockchain, artificial intelligence and big data analytics, which empower asset managers to achieve better returns at lower costs for the benefit of their customers. This part will provide you with an introduction into the future of this sector, which controls global assets of more than US$70 trillion.2
,
