We really like Amy Webb. People tend to have mixed views on the value of futurists. Some call it a pseudo-science which simply collates normative trends and then posits vague and sometimes dystopian forecasts for our future. That might be true of some, but we admire and value Amy’s work. As a firm, we exist to improve financial decision-making for all. Therefore, if we aren’t taking a structured view on emerging trends, we simply could not do our job properly. Building the next generation of financial journeys absolutely mandates us to listen to the ‘signals’.
I am referencing (if not plugging) Amy here as she coined the expression ‘Leaning into the curve’ of the COVID pandemic in a recent episode of the excellent This Week in Tech (TWIT). In it, she described the desire we share to return to our pre-coronavirus existence as soon as possible as inherently human. However, she also suggested that we should fight this urge and lean into the opportunity to build a better world, once the crisis passes. Global catastrophes have historically proven to be catalysts for economic and social change and she is right to highlight the opportunity that we now have.
As well as COVID, the world must now contend with renewed tensions between the world’s two superpowers and the aftermath of the horrific murder of George Floyd. Conditions are febrile, but it is often in moments of maximum uncertainty and duress that lasting, positive change is made. Policymakers are forced to act in the national interest and interventions such as the furlough and the various COVID loan schemes in the U.K. deserve recognition. Nonetheless, few would have predicted a few months ago that 2020 would prove to be such a seismic event, notwithstanding that it’s US election year. Decisions made now will reverberate for years, if not decades to come.
We will stay in our lane here and look at how FinTech can support better outcomes as we come out the other side. We feel the single biggest lockdown epiphany is the now proven net benefits of remote working. Freed from soul-sucking commutes and free to spend more time with their families, productivity levels have peaked. Remote access, cloud-native architectures and modern communication tools have facilitated a seamless transition for most service sector organisations globally. FinTech firms must continue to innovate into this new status quo by developing more world-class B2B solutions. Emergent Cyber and Info-sec vulnerabilities must be mitigated quickly. In the consumer space, digital uptake has moved forward a generation. This has huge ramifications for financial services delivery and FinTech’s must move quickly to develop the next generation of customer journeys, which will likely be hybrid in nature. The client-facing service model has sustained itself largely unscathed over the decades but change here too is underway. Utilities such as Loom are already being blue-printed into the re-design of new front office wealth journeys. Legacy wealth operating models must react to the rapidly evolving demands of their clientele, who now eschew the face-to-face interaction they previously demanded.
Facing what most believe will be the worst economic downturn since the Great Depression, FinTech funding has continued to flow. Understandably diminished from the former torrent, deals signed signal that capital continues to be directed towards building the next generation of wealth. However, whilst some can see the future coming, many would be surprised by the extent that it has already arrived. AI and machine learning have been disrupting the ‘manufacturing’ end of the investment management industry for years. Model portfolios, algorithmic trading and big data have already affected the way firms resource key functions. As machines continue to erode operational capacity previously occupied by humans, wealth management firms should recognise the inevitable evolution of their core value propositions. Historically most if not all advice and wealth services could be described as inherently practical in nature. Now, firms must pay close attention to the holistic and emotional needs of their clients, in many cases making them their priority. If human relationships are to be sustained, then they need to become increasingly human in nature. The wealth managers of the future will need to attune themselves empathetically to what their clients really need from them. Tech and data innovation will continue to provide the platform for relationships that can grow in mutual value. It is now for firms on the front line to redefine their products and grab the new wealth management opportunities that are on the table.
The signals are clear for the global wealth management industry. The post COVID world we lean into will look very different from the one that went in. This will create risk and opportunity even-handedly. The firms that will thrive will embrace the chance to deliver the next generation of digital wealth journeys.