John Schaffer reports on the key WealthTech highlights from the two-day event held in London, and details the fintech players that impressed the most
The Finovate Europe event, which took place on February 7 and 8 in London, allowed fintech players to showcase their offerings through seven minute presentations to a room full of financial services industry players, analysts and journalists. Technology tailored to the wealth industry was a dominant theme during the 2016 event and it certainly caused a buzz. However, this year’s wealth offerings seemed to be monotonous in contrast.
Here are some of the players that made an impression:
DSwiss’ API allows for storage of digital documents and passwords. DSwiss calls it a “digital security deposit box”.
Tobias Christen, CEO at DSwiss told PBI that early adopters of the service were private banks (although the service is now being used by retail banks also). He says that there was a need from high net worth individuals (HNWIs) to upload their sensitive documents, alongside reporting functionality on the information.
“Wealthy clients want to upload their documents as they have a better understanding of risks. They also want to pass on their legacy, and storing documents is a big part of that”, Christen said.
Christen suggested that one of the key differentiators of DSwiss’ document storage service was its search functionality. He said that the search engine indexes uploaded documents, whilst extracting attributes that can be searched for later.
The company has collaborated with numerous private banks including UBS, Deutsche Bank and UniCredit.
Christen said that implementation speed depends on what the bank wants. He noted that the API can be implemented “within half a day to deliver document uploads to accounts.” In UBS’ example, he says it took longer to implement as the bank wanted the “tightest integration” with its existing system.
Comarch’s software, named “Myra”, uses voice recognition technology to re-balance portfolios whilst driving.
Paulina Pow?zka, senior business solutions consultant at Comarch, describes the service as a “conversational AI car assistant”. She told PBI that there was demand for the technology due to the amount of time people spend in their cars – which she suggests amounts to approximately 600 hours per year.
Pow?zka illustrated how the novel service could be used to give performance results as well as to change a customer’s asset allocation whilst driving.
Salemove provides co-browsing API software that allows financial institutions to explain complex products to their clients online. Part of Salemove’s Finovate presentation illustrated the technology being used in a robo advice context, via a video chat.
Daniel Michaeli, co-founder and CEO at Salemove, said that clients want an element of human interaction when looking at complex financial products. He told PBI:
“Specifically for advice, you want to have a high touch conversation and feel like there’s a human behind the technology.”
Michaeli said that the service can be integrated on top of any wealth management or private banking platform. He added that “several” private banks are using Salemove’s software, but that he was unable to disclose specific names.
Earlybird showcased its Twitter tool for financial services employees. It allows compliant use of Twitter in a read only fashion and condenses Twitter feeds into specific financial topics.
Danny Watkins, founder and CEO of Earlybird, said that “Twitter has some inherently huge risks”, and that trying to use it in its raw form is “next to impossible”. He told PBI the reasoning behind the read only approach:
“One, if you’re a trader or analyst and you start tweeting, it could be financial abuse and result in a fine for your bank. Two, there’s a risk of a competitor seeing what you’re doing. Three, the direct messaging capability on twitter is the worst risk as it provides a secret, encrypted communication channel for employees.”
Watkins says that two out of 10 of the top tier banks are using the technology, as well as a number of hedge funds. However, he says that they do not want to publish their use of the service.
Wealthify’s CEO, Richard Theo, was keen to showcase the simplicity of Wealthify’s interface at Finovate. He quoted Apple founder Steve Jobs as saying “simple is harder than complex”. This appears to underpin Wealthify’s focus.
Theo tells PBI: “We have a list of 40 terms in our office that we can’t use including discretionary, passive, active and ETFs. The industry is so used to these terms but the average consumer does not know what they are.”
Wealthify is also looking to provide both online investment API solutions, as well as white label solutions. Theo said that Wealthify was “created from the bottom up”. He added: “We created APIs even before the website was built.”
Theo told PBI that Wealthify currently has two clients using its white label solutions.
aixigo is hardly a new player in the market, having been founded in 1999. Although a rather mature company, their use of technology through APIs is driving innovation and has been popular among incumbent wealth management players – especially in the German market where 10 banks are using the company’s API system.
aixigo presented its Amazon Alexa integration during its Finovate presentation, which used AI to enable clients to delve deeper into their investment portfolios. Marcus Grundler, head of platform development PMS at aixigo, told PBI that the demand for this service came from the need for quicker responses to client requests.
Grundler said that aixico provides analytics, re-balancing and monitoring services for wealth management which he said acts as a “basic infrastructure for a robo advice platform”. He added that many of the traditional players want to get into the robo advice space and that aixigo is providing a fully formed robo advice solution for them.
aixigo touts that it can handle millions of customers’ portfolios in milliseconds. It claims that it can handle even very large portfolios of over 30,000 transactions with a 10 year history.
Grundler added that Commerzbank is using aixigo for reporting for one million private banking portfolios.
Beyond the players, we also noticed some key trends emerging at the event itself.
Fintechs are looking to collaborate with traditional players
At this year’s Finovate, the fintechs were notably less ambitious in their aims to disrupt banking market.
Collaboration through APIs and white label solutions appeared to be the strategy for WealthTech providers. This is perhaps reflective of the performance of the overly hyped robo-advisors. Most have yet to release their assets under management (AuM) figures, and the attractiveness of collaborating with traditional incumbents, who have large amounts of capital on their books, must be apparent.
Even robo advisors who are well established, such as Wealithfy, were keen to share their architecture with traditional incumbents. The robo advisors mainly presented the usual selection of passive portfolios.
Collaborations do seem to be the best way forward for the industry and is most beneficial to the end client.
Wealth management APIs are on the rise
Wealth focussed application programming interfaces (APIs) were far more prevalent at this year’s Finovate.
APIs allow for fairly seamless integration between fintechs and traditional players. An API provides a modular way to add new functionality to a pre-existing system.
Notable APIs included Comarch’s in-car portfolio management tool and a digital security box service from DSwiss.
Amazon Alexa is this year’s key gimmick in customer interaction
Amazon’s Alexa product was featured in numerous presentations at this year’s Finovate.
Most notable was Aixigo’s showcase of Alexa’s functionality into its wealth management API, which was using artificial intelligence (AI) to interact with clients via voice activation.
AI made an apperance several times over the two day event.