Asset and wealth management sector to experience impact of fintech startups, says PwC report

A report by PricewaterhouseCoopers ranked the asset and wealth management sector as the third most likely to experience the game-changing impact of fintech startups.

According to the official release, the report titled “Beyond Automated Advice: How FinTech is shaping asset & wealth management” is part of the 2016 PwC Global FinTech Survey. It revealed that 60% of asset and wealth managers think that at least part of their business is at risk to fintech. According to the report, 61% of respondents are expecting an increased pressure on margins, followed by 51% who are concerned about data privacy and 50% in loss of market share.

“Banking and payments industries offer palpable examples of fintechs changing the financial sector by offering new solutions that are visibly disturbing traditional players. This should be an eye-opener for asset and wealth managers as they are next in line, while their FinTech mindset is still in its infancy,” Julien Courbe, PwC’s Global FS Technology Leader said. “We strongly believe incorporating FinTech solutions will visibly strengthen their market position.”

Around 90% of the asset and wealth managers found that data analytics as the most important trend for the next five years. This was followed by automation of asset allocation since ‘robo advisors’ are putting pressure on traditional advisory services and fees. Instead of expanding digital and mobile offerings, asset and wealth managers prefer new technologies that are related to data analytics and automated asset allocation, when it comes to investment. According to the reports, only 31% of them provide their clients with mobile applications.

“With ‘robo advisors’ becoming more sophisticated, they create an opportunity for asset managers to target the mass affluent who are looking for cheaper alternatives to receive advice on how to manage their assets,” Courbe added.

The asset and wealth management-focused report was framed based on the responses of 163 respondents from the asset and wealth management sector around the globe.