A subset of fintech expanding in relevance, WealthTech involves leveraging modern technology to optimize wealth management processing. Many of the tech innovations used for this purpose parallel those already transforming the financial sector. These largely include AI and machine learning in tandem with automation, ultimately making back-office processes more efficient.
Let’s examine the emergence of WealthTech in the wealth management space, covering its benefits for providers in this arena. Use these insights to improve the efficiency of your operations, resulting in happier clients and a healthier bottom line. Reach out to the team at The CERES Group as a talent resource for this emerging fintech sector.
Analyzing the Growth of the WealthTech Marketplace
A recent study from Allied Market Research projected the growth of the WealthTech solutions market up to 2031. Their research forecasts a market expansion from $4.8 billion in 2021 to $18.6 billion in 2031. That growth reveals a compound annual growth rate (CAGR) of 14.8 percent. Notably, tech companies looking for a new market with copious opportunities need to explore the emerging WealthTech sector.
Relevant Use Cases for WealthTech in Wealth Management
As highlighted earlier, the use cases and technologies within WealthTech largely match those already established in the fintech sector. AI-optimized portfolio management software, robo-analytics, and machine learning-powered data analytics offer some common examples. The ultimate goal of these solutions includes improved efficiencies, reduced expenses, and happier clients.
In a similar fashion as fintech, a major goal of WealthTech involves letting wealth managers focus on value-added tasks. The use of automation and AI-empowered data analytics frees up time for the managers in this scenario. Well-designed applications facilitate portfolio management by providing market performance alerts and investment monitoring.
Exploring WealthTech Service Offerings
A variety of service offerings exist for companies providing WealthTech management support. The team at McKinsey categorized them into three major areas.
- Direct-to-Consumer WealthTech: Companies deliver these WealthTech services directly to retail investment customers. These providers support mass market investors no matter their wealth levels.
- WealthTech Services to Financial Institutions: Conversely, some WealthTech service providers support financial institutions. They might provide institutional traders with the portfolio management tools mentioned earlier or help optimize their current back-end processes.
- WealthTech Services to Financial Advisors: Finally, other WealthTech providers offer direct support to financial advisors. Once again, the WealthTech service provider implements AI-powered software and automation tools to make each advisor more efficient.
If your company wants to implement a WealthTech solution, let’s schedule a meeting to discuss the possibilities.
