Although wealth management is more than 200 years old most of the time its providers have been following the same best practices. Massive digitalization and regulation that we have witnessed in recent years changed it. The data shows that most providers have been innovating slowly and some are still trying to do their business the traditional way.

The biggest obstacles that are preventing the change are fear of losing customer relations managers and their customers and a long bullish market which wasn’t forcing wealth management providers to do those hard decisions earlier. Although the customers base and amount of assets traded have grown the profits of this sector haven’t grown in ten years (2007-2019). Covid-19 pandemic should be a last call for providers who should focus on innovations that should have been done a long time ago.

FinTech Roadmap

For every area of FinTech, we create a strategic table in which we identify incoming trends, key factors, challenges, and comparison of the state in the Czech Republic to other countries to provide companies an overview on how to implement the newest technologies.

Incoming trends Key factors Challenges Comparison to world
ESG investing The growing interest of society in environmental and social topics Combining high returns with environmental and social factors It’s gradually beginning to appear also in CR
Robo-advisors Automated and simple investing Managing complex situations and customization It’s gradually beginning to appear also in CR (Portu, Fondee)
Digitalization of customer support The emergence of chatbots and automated systems The ability to derive specific client needs and acting accordingly will separate the best and others. Personal contact will be still important especially for HNW clients It is in an active process in CR
Digitalization of securities Legacy infrastructure with high costs are still being used on capital markets, regulations, automatization, transparency Standardization and propper digitalization We didn’t find any Czech company working on this trend
Using AI and ML for the acquisition of clients It has been a manual and costly process Fulfill expectations of customers that are used to the BigTech level of customer experience It’s gradually beginning to appear also in CR
Using advanced analytics The need to increase alpha to prevent clients from switching to passively managed funds and ETFs, an opportunity to cut costs and increase effectivity Unwillingness to invest, relevant data selection, lack of experience, system limitations It’s gradually beginning to appear also in CR
High personalization if investment products Machine learning and visualization tools are lowering the costs The goal is that asset managers should be able to create personalized investment products by just clicking a button. We didn’t find any Czech company working on this trend
The shift of demography of a typical investor Emerging markets, inheritances, HNW Clients are switching from traditional asset management providers to BigTech It is in an active process in CR, mainly foreign solutions such as Revolut are used
Emerging markets will surpass the developed ones Fast-growing wealth in Asia (ex. Japan), growing HNW and ultra HNW segments Predictions are forecasting that Asia will overcome Western Europe and will become the second most wealthy area of the world by 2022 Irrelevant