If you attended Fintech Meetup, you likely speed dated for networking, maybe pet an emotional support animal or two, cruised through the elaborate exhibit halls, or attended sessions hosted by thought leaders.
Our team spent time doing all of these things, then found ourselves gravitating towards a few themes and threads we consistently encountered. Below you will find adapted content from Amanda and Dan’s musings after the event.
Eliminate redundancies through partnership.
While we attended, we were in the middle of a possible banking crisis. Silicon Valley Bank had just collapsed, putting a spotlight on banks and efficient operations. Much of the conference focused on this idea of eliminating redundancies through a myriad of ways, largely through some form of partnership. As Dan shares, “Over the past five years or so, the talk track around partnerships has absolutely changed. At one point in time it was, “Do you partner?” and I think now for firms large and small, it’s no longer a conversation of “do you partner,” it’s “where do you partner?”
You’re going to partner, so what should you look for in a Fintech partnership?
During one panel featuring leaders from The Financial Brand, Citi, Wells Fargo, and Huntington National Bank, they talked about the “4 s’s” to consider when picking a fintech.
- Speed: Are there partnerships that can be executed that allow you as a firm to get to market more quickly than if you were to build it yourself?
- Scalability: Does this partnership allow you to scale a business or scale a segment strategy in a way that might not have been possible?
- Service: Is the fintech with you for the long-haul? Do they have your backs after you sign on the dotted line?
- Security: Security is table stakes, so the fintech partner you choose needs to be able to drive forward meaningful advancements, following compliance and regulatory execution from a risk management standpoint.
Amanda summarized that, “A fintech partner should talk to you about their 3 to 5 core capabilities. And then you reflect on this and say, are these also our core capabilities? If those capabilities are outside your wheelhouse, ask, “Does this firm get my customer segments, do they understand my mission and culture, and can they immediately add value – If yes, then this is who you partner with.”
Founders and startups continue to drive innovation.
It was invigorating to see and learn from a number of founders that have a lot of passion around what they’re building and what they’re starting. We saw firms focused on innovating wealthtech, payments, and a lot around digital identity.
Amanda shared her insights related to the startups and SigFig’s product strategy. “We strongly believe the new path forward for digital advice will combine human advisors with robo-technology to create more streamlined digital experiences for clients across multiple segments. While there is still a space for digital-only solutions, we see an emerging middle space in serving mass affluent customers that prefer a technology-led approach but still want the touch of a human advisor. You know, we are helping our financial institution partners leverage our robo-technology platform to build advisor efficiency and effectiveness to reach this fast growing segment through a hybrid approach, blending technology with human advice.
We see tremendous growth potential for this model going forward, particularly with the next generation of affluent investors. It’s no longer just about relationships on a golf course.”
So what does the future of financial advice look like?
In the near-term, the future is going to be utilizing technology to improve the segmented service model for both advisors and clients. We’re talking to a lot of leaders about questions like, “How do we position advisors differently? How do we give the home office a little bit more P&L control? How do we still have a great advisory experience, but offer a digital-only backup if the client isn’t ready for a conversation?,” Dan mused.
Amanda chimed in, “I agree—We want to help our partners find value in serving that middle segment of mass affluent investors and so we suggest focusing on efficiency. The opportunity to combine behavioral data with account data to drive an action that has positive outcomes for clients is still largely untouched. Because wealth management requires having a clear understanding of a client’s goals and risk tolerance, it allows us to build solutions that answer questions like,”How do we help large firms with hundreds, maybe thousands of advisors, really nurture folks at the right time?”
You know that client of yours has a son who’s going to kindergarten—how do firms like ours facilitate a nudge campaign that reaches out and asks if they’ve got any child care savings?”
Last, but not least, generative AI and LLMs will play a big role in the future of wealthtech. Finding ways to enhance customer service, improving advisor efficiency or identifying new asset opportunities in real-time, the areas for these tools to add value are vast. We continue to plan and invest in this topic and how it can help our partners achieve their strategic objectives and provide a better client experience.
If we missed seeing you at Fintech Meetup, we welcome the opportunity to connect and hear your perspectives on the current and future wealthtech landscape.
