Fintech in Wealth Management – Concept, Impact, Benefits, Adoption & more

Know everything about the impact of Fintech in Wealth Management here.

The current trends suggest that fintech will have a disruptive effect on wealth management as it already has started the same.

We have discussed the reasons of Fintech Disrupting Wealth Management in the following article, so keep reading!

Technology and digitalization have completely changed the way the world functions. The same implies to the financial world.

Fintech has been on an uphill ride of development and advancement ever since the 1980s. It has greatly affected every field of the financial world. And wealth management is and no exception to the same.

Wealth management and fintech cater to similar needs therefore with the popularity and development of fintech there has been a disruptive effect on wealth management.

People tend to think from a futuristic perspective in the corporate world, specifically in the financial world it is very important to do forecasting.

Concept of Fintech

The use of technology in finance has greatly benefited multiple companies, corporates, investors, etc. Fintex are start-ups that give financial tools and financial services.

These are based on the latest technology and digital resources. Fintech rises with an obvious aim to disrupt wealth management.

This has a great impact. In 2017, we could see a rise in investment in Fintech. The investment rose upto 18% to over 1 trillion 82 billion INR.

Also, more than 7 trillion INR have gone into tech ventures since 2010. These huge figures prove how important technology and firms will be in the future.

They might in fact shape the financial world in a way that nobody has thought of yet. Fintech uses technology and gives results, it is extremely accurate and efficient.

Past data and existing knowledge are what the testers use to develop plans and strategies. These strategies which are based on experience are greatly effective.

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Impact of Fintech in Wealth Management

AI and digitalization have taken the world by storm. When this is the financial world, fintech has taken the financial world by storm.

And even though this is still in the infancy stage it will take over the financial world. There has been great investment into the field of fintech to develop these firms.

This gives proof to the fact that people see it as an upcoming area. This is likely to take over many wealth management firms.

Many consumers who changed their primary wealth management firm chose other firms that were digital in some of the other way.

Moreover, more than 72% of investors and the age of 40 say that they will be more comfortable working with a virtual financial advisor.

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How is Fintech disrupting Wealth Management?

There are many people who are opting for AI and digital options when it comes to financial advisors.

Especially in the modern generation wealth management that does not adopt fintech tools sooner or later are likely to face issues in the future because they are not up to date.

Even though wealth management has been an important part of financial planning and management fintech provides for the drawbacks of wealth management.

Because fintech uses carefully calculated decisions to give services to the consumers people tend to choose fintech or Robo-advisors.

It uses the information from the past and the needs and requirements of the client to provide the best service.

Wealth management was indeed the one-stop-shop for people looking for financial advice or guidance or any other service.

With the introduction of fintech, there has been indeed a huge impact in financial markets. Fintech reduces the cost that people have to spend on financial planning and management.

The accuracy, speed, less cost, etc that fintech offers makes clients attracted towards the same.

Due to the fact that traditional wealth management does not use technology as advanced as fintech does it lag behind in the long run.

People in the modern world want to be up-to-date with developments as well as technologies. Fintech provides an opportunity to do the same, therefore people naturally like it.

Technology and digitalization are an ever-growing field and therefore adapting to developments in the same is a wise decision.

Fintech in Wealth Management – Benefits

Because one’s survival depends on one’s ability to adapt to changes, it is important for wealth management to slowly but steadily start inculcating fintech into their services.

Inculcating fintech will not only help in knowing about technology and digitization but will also help in reducing cost and increasing the quality of services.

It will also help in getting clients and consumers who would like to the use of technology for financial planning. Therefore this will increase the reach as well as knowledge of the wealth manager.

Fintech provides fully AI and digital-based financial services. There are still people who are uncomfortable about going 100% digital when it comes to financial services.

Having a combination of both traditional wealth management as well as fintech will greatly help in surviving the future in the financial world.

Even though fintech provides a lot of different financial services, it hasn’t yet developed to a level such that it can cater to all the needs that were before taken care of by wealth management.

Therefore, even wealth management might get disrupted but it will always be needed in some form or the other.

A merging of both fintech and wealth management will give for the needs and requirements and at the same time cater for the drawbacks of the two.

Everything has its rise and fall. Everything gets replaced. The same is being observed in the financial world.

With the rise of fintech the disruption of wealth management is assured. The only way wealth management can survive the same is by adapting the developments.

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Fintech in Wealth Management – Adoption

Even though fintech is changing wealth management, only 45% of AMW’s agree to replace their primary strategy based on fintech.

Most of them agree that fintech will be adopted but only partially.

Even though fintech provides accurately calculated results, it is important to remember that wealth management will provide a lot more to the clients than fintech.

This is because wealth management provides more than just financial advice and guidance. This often goes unnoticed but comes in handy for the client.

Sooner or later people will realize the fact that having a fully digital advisory system might not function as efficiently as the traditional advisory system.

This is because having fintech will remove any emotional, cultural, behavioral, etc influence on the advice.

Even though a lot of people see this as a benefit of fintech, these things are important in the long run. This is where wealth management becomes more important.

This only makes it practical to adopt a system in which fintech is used but in a limited way.

Many wealth managers see the impact of fintech as a trend to gain knowledge about technology and adaptability that people should follow because of changes in the marketing world.

Moreover, because Fintech is more of a technology and digital base, people are willing to move into it.

Fintech successfully delivers financial services with the help of technology and therefore many clients adopt the technology.

There has been a trend of people switching to more or less digital ways of financial planning as well as management.

Conclusion – Fintech in Wealth Management

It is more than just obvious that fintech will be a huge field in the future and therefore investing in the same and incorporating the same is a wise decision.

At the same time, one must not forget that firms change according to the consumer’s needs and wants. It is important to realize as a consumer that fintech is beneficial but only when its use is limited.

The benefits and knowledge that one can gain from traditional Wealth Management are not something we compare with the limited service that fintech will offer.

Wealth management provides not just financial services but often dwells into other issues and helps solve the same.

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