Wealth Management Sample Assignment

(Source: Cortina et al., 2018)

There are many arguments regarding the development and expansion of the utilisation of the Fintech and the influence of the traditional financial intermediaries. The positive elements are there in an large extent including block chain and crypto currencies, the alternative payments methods and the investment banking that are not properly use the company’s regulation and the scope of the misuse of the data and the security are the major concern. As a result, many articles, authors and publications are there who strongly believe the disadvantages of using Fintech in the area of traditional financial approaches. The traditional financial system has the huge benefit and adaptiveness for its security as the traditional system implies its operation with maintaining the business regulations and practices. In Fintech technology implementation the lack of legitimation of the government regulations and rules are not maintained to ensure the customer security and data protection. This is one of the most significant area of concerns as it can affect the financial sectors in a negative way. Many areas are there to develop in Fintech including data privacy and the differentiation of the business model to compete in the global market by showing the own uniqueness. However, there are significant threats regarding the Fintech companies which can decrease the potentiality of the company’s operations. It is recommended for all the Fintech companies to legitimate the suitable regulations to mitigate the unnecessary risks regarding the password safety and the data privacy and hacking. The shadow banking is there that has the unfair competitive advantages and does not have the ability to achieve the customer’s data safety. In order to enhance the legitimating the RBI has established the Working Group on Fintech and Digital Banking to closely track on the development of the Fintech related safety and improve the legislative solution to bring the effectiveness of the utility of Fintech in the marketplace all over the globe. The regulatory body of many business organisations are mostly concerned about the revolution as the development of Fintech has partially affected the financial sector. Around 45% firms are strongly agreed and accepted the new technological evolution and admit the significant impact of it to the financial sector. Majority cannot agree with the modern technology adaptation as it also affects the traditional value chain management and complicate the existing business scenario to not promote the proper security of the confidential data and information regarding the privacy of the data authentication (Sironi, 2016).

Opportunity of mitigating the problem regarding Fintech

There is financial innovation to mitigate the problem related to the Fintech implementation in the big financial houses. The financial innovation has the ability to show the promising aspects and the opportunities using the innovative technology are there which can broadly enhance the utility of the acceptance in an effective manner. In order to bring the effectiveness of the Fintech the regulatory body of each country has decided to legitimate the limitations regarding the Fintech innovation in the financial sector. The risks associated to the Fintech opportunities are required to be understood by the financial firms, customers, regulators and other stakeholders. Risks regarding the payments of the consumer finance are there which is to mitigate with the help of implementing the security of the password reformation to develop the techniques more effective and encourage the business forms to use for make the new products and services within spending a lot of time. The costs for implementing the Fintech to bring the evolution for generating the new range of products and services as per the customer’s value and requirements. For an example, most of the Fintech adopted firms are there who are exploring the non traditional data in order to get the information about the pricing credit products. Non Traditional data cannot have the potentiality to evaluate the customer's history regarding the credit score. Non Traditional data including level of education and usage of the social media cannot provide the necessary historical data which can generate the surety and the security of the current status of the firms. It is required to maintain the legal compliances and establish the creditworthiness for protecting and ensuring the fair lending law. The management regulatory body of the business firms are required to increase the customer’s convenience by maintain the data sharing security and privacy and data ownership risks. The recent occurrence of the large scale fraudulent activities and the cybercrime riding the security breaches has evaluated the possible risks. The historical credit pricing risk is one of the biggest concerns in the Fintech industry. The improvement of the crist access and the ability to secure a loan or determining the prices and the impact of the behavioural changes need to be adjusted (Ng and Kwok, 2017).

The regulatory engagement are provided by the Federal Reserve is required to be well positioned to help the illustrating of the development and meet the expectations of the market competitors. The regulation aspect in the Fintech technology implication has the tendency to arise the big question regarding the security and privacy of the applications of the new technology. As the result the regulatory body of the management are required to consider all the risks that are associated with adaptation of the fintech service by implementing the proper laws and track the activities to generate the trustworthiness. The safety regarding the financial service is very important as it can create the impact on the customer relationship and help to achieve the fundamental aspects of the business activities. Other than that through the proper implication of the regulation the firms can adopt the fintech service in a significant basis. The regulation of the business firms are also needed to establish such laws through which the business firms can ensure that the new technology can not affect on the traditional approaches. Thus the company can generate the healthy ecosystem in which the complexity cannot be raised. In order to increase the flexibility in the financial sector it is also important to establish the rules through which the clash of traditional approaches and modern approaches can operate properly in their own filed (Anagnostopoulos, 2018).

It is said to be crucial for the financial firms to provide proper innovation to take necessary statements and regulate the understanding and mitigate the associated risks. Taking this into consideration there may be different ways through which tension may lighten up the pace of development under which it the new products brought out may sometimes help in specialising the finance and ensure it to be important for the risks around the financial services. The firms need to ensure must need to control the performance and mitigate the risks to be unique to perform and maintain the risks that are existing in the company. There are some fintech companies which explores the non traditional data and pricing credit products. On the other hand the non traditional data must need to have potential information to help and evaluate the last credit histories. Taking this into consideration the level of education and social media usage may not need to be taken into consideration and empirically established through credit worthy and must need to correlate the characteristic and protect the fair lending laws. In taking control of the performance under which consumers may generally take some working senses through which the financial behaviour may affect the traditional credit score methods to be done as per the new challenges and may raise the questions under fairness and transparency (Gomber et al., 2018).

Conclusion

The particular portion provides a proper illustration about the disruption by fintech in wealth management along with the functions that are being owned by the companies to take control of the wealth management and its impact on the fintech driven companies. Information had also been provided for the opportunities of mitigating the problems regarding the companies under fintech. With the elaboration of the study it will be suitable in concluding that the performance relating to the companies following fintech must need to know about the performances that will be suitable to perform. Identification of the key contributors will also be provided and make it easy to take control of the performances as per the requirement.

Part B- Analysis

As per the above elaboration under which it can be said that the current scenario of wealth management is said to be one of the biggest concern under which it is making it difficult for the companies to properly take control of the performance in the necessary procedures. Financial technologies or ‘Fintech’ is the emerging field in interacting with the financial services and take control, of the new technologies (Ghose et al. 2016). Fintech companies are taking necessary controls in utilising the cutting-edge techniques in order to provide a suitable performance to the consumers and the business. While there are various start-up companies who specifically focus on the initiatives in making the performances under financial technologies to know the larger companies. For example, The FinTech technologies are said to be as crypto currencies, which have dominated the performance of various companies in the past year. However, these crypto currencies do not cover the entire FinTech technologies; in fact, it represents the very small fractions within the technologies (Citi, 2016). This technology also includes different payment companies like peer-to-peer lending companies and even larger companies like Apple Inc.

There may be different ways through which the FinTech Technologies is affecting the Wealth Management Industry and in elaborating this technique the different points that can be considered are as follows:

1. Taking Robo-advisors under ‘Digital advice Platforms’ that provides financial and investment information using different procedures like algorithms.
2. After collecting the information required form personnel the robo-advisors give the advice to proceed with the advice with the best way possible.

Robo-advisors are around the world for around a few years now and they have begun to use necessary adjustments in providing advice as per the requirement. However, it can also be said that the Robo-advisors have become more effective on the virtue of which wealth managers are focusing less on the investment management and more time in building client relationships (Sironi, 2016). This is key wealth management which is very relevant in creating relationships under which it can be said that Tech savvy advisors consists 40% more assets under management (AUM) and provides 55% more customers/clients. The advancement of the digital aspect had made it easy for the companies to take control of the performances and lead up necessary adjustments into consideration it can be seen that the digital advancement had made it effective for the customers to raise their standard and the customer's service into consideration and as per the requirement. Taking this into consideration the implications that can be seen are as follows:

• Little differentiation relatively: Robo-advisors relatively are active in replicating the advice. However, it may become difficult for the firms to take control of the differentiation and the services that are being provided. In this context, it may become hard for the company to properly lead up the works accordingly.
• Job Enabling vs Job Replacing tech: A few years back robos were feared as they could replace humans as the robots were taking the market speedily. In the current generation the consensus that the robo-advisors are making it more effective for the company to build up customers base (Gomber et al. 2018).

There are few wealth management companies that take control of the integration and have integrated robo-advisors. The advisors must still need to take the context of the change that is happening around in order to understand the works that need to be taken into consideration to force the advisors into power once again. Every year the Fintech is working on the process to make a proper elaborative innovation however, the global investments in the financial technologies are being invested to provide a suitable innovation to the customers. In this context as per 2017, the ventures resulting under financial technologies were recorded as $27.4 billion which has risen to 18% from last year. On the other had it was also noted that about $100 billion has gone into fintech techniques since 2010. This surge under fintech industry may have something to take control with the rise of the robo advisors. In taking a study to calculate the Global assets under management by the robo-advisors that been recorded as $400 billion in the mid-2018 and is also expected to rise up to 38.2%. The robo-advisors took proper well-maintained documents into consideration under which the profile of the artificial intelligence had been providing a suitable elaboration of the wealth management and also had been making it suitable to perform to the point (Zalan and Toufaily, 2017). With this rapid growth in the innovation system, there is a possibility to innovate more innovation to provide a suitable scale and prepare conversation with the clients/customers. According to a report it was also recorded that in June 2015, 40% to 45% of the consumers had changed the primary wealth management firm into the digital firm.
There are certain ways through which the wealth managers also get impacted by the use of FinTech and make it hard to take control of the performance appropriately. The different ways are as follows:

• The managers operate in a highly regulated aspect under which it becomes hard for the start-ups to properly take control of the foothold
• The nature of wealth and asset products under management is not something that is for the consumers to use on a daily basis
• Asset management is considered to be operating in different ways than cash or credit transactions. There are different complexities under which it becomes difficult for the start-up business may need to target the core under well management firms
• There are different factors which cause provide a suitable degree of security under which there may be no doubt that the value chain under asset and wealth is under threat
• The asset and wealth managers prefer to take control of the performances by sitting on the sidelines while on the other hand, the sell-side banks take to lead and explore the performance of cause.

There are different points under which the asset wealth managers are overlooking the Fintech disruption and will be elaborated in the following points:

• Although it can be said that FinTech is disrupting different areas in different ways possible. Taking this into the asset and wealth managers still, need to believe and protect the potential disturbance by the new start-up bruises.
• The Banking and the payments industries have disrupted the offerings under new solutions and can also be sued as the eye-opener for the asses and wealth managers. Taking this into consideration it may also be said that FinTech will only impact the business in their conduction of their works.
• The asset wealth managers had been using the applications in different possible manner. Instead of following the digitisation the managers are frequently using the website to meet better expectations of the customers (Riemer et al. 2017).

Security and privacy are also facing challenges in providing proper elaboration of works and incorporate the FinTech companies into consideration. Through using the information in a proper manner emerges different data which is available to provide effectiveness to the digital formats. This makes it easy for the companies to analyze and generate the insights in a proper manner and make the data to properly take control of the performances and work accordingly. According to a survey it was also seen that about 56% of the respondents took the information security and privacy as threat to the working procedures of the FinTech.by going online data inequality and consequently data security can be said as a challenge for FinTech (Arjunwadkar, 2018). Taking this into context there may be penetration of online and phone banking to take control of the data in a proper manner for the customers and to generate a proper analysis of the insights for the buying pattern of the customers.

In this context there are different ways through which the alternative regulations to properly respond to the implications through performing properly under potential consumer protection, financial stability issues and market efficiency may help in taking necessary responses to control the performance properly. The different alternative points are as follows:

• Traditional and emergent FinTech: The Traditional FinTech established technology companies under which major working procedures of the companies can be visible highly. Opportunities under this context may give rise to the asset and wealth management to take control of the strategic partnerships and also help in ensuring the technologies to adapt as per the requirement. The other type of FinTech firms takes coordination in disruptors and takes control of the abilities to put the elements under traditional wealth management value chain under proper threat.
• Low-Cost transactions platforms: The regulators under Fintech apply high fee transparency in different industry that results the different organisations to operate under costs and also become less attractive to the consumers. Taking this into consideration the asset and wealth managers must need to adapt and agile low-cost models into consideration (Bussmann, 2017). This may help in platforms that are high disruptive and the models that are low and simple will help in understanding the performances and helps in maximising the income for the asset managers.
• Customers based on transactional and relationship: FinTech companies take the customers base under transactional and relationship under two different types which are as follows:

1. Transactional client: Taking this aspect into consideration it may often by defined that the fee for service arrangement helps in providing proper benefits to the innovation techniques in self-service advice and payment process under automated under account management (HODELL and Nilsson, 2016). Taking this into consideration there may be different ways under which the company must need to control the necessity of the customers.
2. Relationship-based Client: There are different kinds of clint that provides a preamp elaboration of works through which the personal relationship between the planner and customers can be taken into consideration properly (Liu, 2019). This makes it easy to enhance the relationship and through integration of the multi-channel communication it becomes easy to view the customer's necessity.

• The experience of the consumers and data analytics work as a key: The expectation of the consumers must need to be from the assets and the management that is provided to make a proper change into the works that are being done throughout the year. Digitising the service make engagement with the customers in real-time and digital documentation to offer a proper platform for the consumers to get immense back-office opportunities (Cai, 2018). The capacity to reduce the costs must need to be restored by the organisation and bring a proper efficiency model to improve the customer experience. On the other hand, the different start-up companies are trying to take control of the experiments under use of social media and helps in providing a proper market sentiment to redress the balance to investment mix. This makes it easy for the company to properly lead up the works and maintains the performances as per the requirement. Fintech companies are taking necessary controls in utilising the cutting-edge techniques in order to provide a suitable performance to the consumers and the business (Teigland et al. 2018). While there are various start-up companies who specifically focus on the initiatives in making the performances under financial technologies to know the larger companies.
• Robo advisors are getting into the market: With the emergence of the new techniques it is becoming easy for the industries to properly take control of the investment process and provide a proper model for the handling of the computer driven performance (Cortina Lorente and Schmukler, 2018). It has certain advantage and disadvantage such as through robo-advisor the company can generate the customer attention for providing the better experience and thus the business firms can enhance the customer relationship in an advance level to promote the innovative technology in the financial system.

Conclusion

The study provides a proper elaboration of Financial Market and the literature review under disruption by fintech under Wealth Management. The literature review provides a suitable elaboration of the key areas which provides information for the synthesis of the applicable knowledge required for the companies to take the performances into consideration. Analysis regarding the different aspect under which proper knowledge and development regarding the implications of the disruption identified makes it easy to analyse the alternative regulatory to properly take control of the performances and make it easy for the fintech users to perform properly.

References

Altenhain, T. and Heinemann, C., 2018. Fintech Hypes, but Wealthy Internet Savvy Investors Prefer to Stay Hybrid. In Digital Marketplaces Unleashed (pp. 343-357). Springer, Berlin, Heidelberg.

Anagnostopoulos, I., 2018. Fintech and regtech: impact on regulators and banks. Journal of Economics and Business.

Arjunwadkar, P.Y., 2018. FinTech: The Technology Driving Disruption in the Financial

Banking?. World Bank: Research & Policy Briefs Paper, (125038).

based FinTech companies.

Beaverstock, J.V. and Hall, S., 2016. Super-rich capitalism: managing and preserving private wealth management in the offshore world. Handbook on Wealth and the Super-Rich, Cheltenham: Edward Elgar, pp.401-21.

Benson, L.K., 2015. The Past, Present, and Future of the CPA Financial Planning Profession. The CPA Journal, 85(9), p.10.

Bussmann, O., 2017. The Future of Finance: FinTech, Tech Disruption, and Orchestrating

Cai, C.W., 2018. Disruption of financial intermediation by FinTech: a review on crowdfunding and blockchain. Accounting & Finance.

Citi, G.P.S., 2016. Digital disruption: how FinTech is forcing banking to a tipping point. Mars.

Cortina Lorente, J.J. and Schmukler, S.L., 2018. The Fintech Revolution: A Threat to Global Banking?. World Bank: Research & Policy Briefs Paper, (125038).

Cortina Lorente, J.J. and Schmukler, S.L., 2018. The Fintech Revolution: A Threat to Global

Development of FinTech: Accounts of Disruption from Sweden and Beyond. Routledge.

Disruption: How FinTech Is Forcing Banking to a Tipping Point. Citi GPS.

Disruptive. Contemporary Economics, 11(4).

FinTech Disruption. The FinTech Book: The Financial Technology Handbook for Investors. E.

Ghose, R., Dave, S., Shirvaikar, A., Horowitz, K., Tian, Y., Levin, J. and Ho, S., 2016. Digital

Gomber, P., Kauffman, R.J., Parker, C. and Weber, B.W., 2018. On the Fintech Revolution:

Gomber, P., Kauffman, R.J., Parker, C. and Weber, B.W., 2018. Special Issue: Financial Information Systems and the Fintech Revolution.

Hill, T., 2017. Manufacturing strategy: the strategic management of the manufacturing function. Macmillan International Higher Education.

HODELL, A. and Nilsson, C., 2016. Digital Disruption–Exploring Innovation in Stockholm

Innovation. In Equity Markets in Transition (pp. 473-486). Springer, Cham.

Interpreting the Forces of Innovation, Disruption, and Transformation in Financial Services.

Journal of Management Information Systems, 35(1), pp.220-265.

Liu, C., 2019. FinTech and Its Disruption to Financial Institutions. In Organizational

Mills, J. and Broughton, V., 2016. Bliss Bibliographic Classification: Class T: Economics Management of Economic Enterprises. Elsevier.

Ng, A.W. and Kwok, B.K., 2017. Emergence of Fintech and cybersecurity in a global financial centre: Strategic approach by a regulator. Journal of Financial Regulation and Compliance, 25(4), pp.422-434.

Riemer, K., Hafermalz, E., Roosen, A., Boussand, N., El Aoufi, H., Mo, D. and Kosheliev, A.,

Salampasis, D., Mention, A.L. and Kaiser, A.O., 2017. Wealth Management in Times of Robo: Towards Hybrid Human-Machine Interactions.

Schyns, P.F.M., 2016. The technological future of the wealth management industry for portfolio management investment services (Bachelor's thesis, University of Twente).

Scott, L. and Cavaglia, S., 2018. Practical Applications of A Wealth Management Perspective on Factor Premia and the Value of Downside Protection. Practical Applications, 6(1), pp.1-5.

Services Industry. Auerbach Publications.

Sia, S.K., Soh, C. and Weill, P., 2016. How DBS Bank Pursued a Digital Business Strategy. MIS Quarterly Executive, 15(2).

Sironi, P., 2016. My Robo Advisor was an iPod–Applying the Lessons from Other Sectors to FinTech Disruption. The FinTech Book: The Financial Technology Handbook for Investors, Entrepreneurs and Visionaries, pp.152-154.

Sironi, P., 2016. My Robo Advisor was an iPod–Applying the Lessons from Other Sectors to

Teigland, R., Siri, S., Larsson, A., Puertas, A.M. and Bogusz, C.I. eds., 2018. The Rise and

Transformation and Managing Innovation in the Fourth Industrial Revolution (pp. 104-124). IGI Global.

University of Sydney, Business School and Capgemini.

Varghese, J., 2018. Impact of fintech on Irish wealth management industry (Doctoral dissertation, Dublin Business School).

Vives, X., 2017. The impact of FinTech on banking. European Economy, (2), pp.97-105.

Zalan, T. and Toufaily, E., 2017. The Promise of Fintech in Emerging Markets: Not as