Wealth management companies have been leveraging technology to improve efficiency and customer service for years. With a recent rise in competition from start-up and legacy firms, the need for innovation has increased to maintain market share.
Many trends will shape the future of wealthtech management, with artificial intelligence (AI) and machine learning (ML) at the forefront. In this article, we’ll examine some trends shaping how we manage our money in the digital age.
Significant Statistics in Wealth Management Sector
An intelligence report reveals that the wealth management software development market valued at US$3.6 billion in 2021. It is projected to grow a value of US$8.15 billion by 2027.
Wealthtech management software is accounted for a compound annual growth rate (CAGR) of 14 points or about 56% over the period from 2022 to 2027. With this huge market, the wealthtech market remains to grow in the future.
The wealth management market share was valued at US$1.25 trillion in 2020. Wealthtech industry projects to grow by US$43 trillion by 2030 and will grow to a CAGR of 10.7% from 2021 to 2030.
Robo advisors, quasi-banks, and other fintech solutions are predicted to have the largest growth compared to other wealth management solutions in years to come. In 2021, the use of financial technology for wealth management it’s about 8% but expected to grow more than 14% by 2022. The highest usage of wealth management comes from fund managers.
Top Trends in Wealth Management in the Global Scene
Wealthtech is a sub-category of fintech that combines the wealth management industry and digital technology in how people manage and control their funds in a wealth management software solution. Developers are implementing advanced technologies to create digital wealth management software solutions like artificial intelligence (AI), machine learning (ML), blockchain, cloud computing, and other wealthtech software development tools.
With the changing technology in the fintech industry, there are top trends a wealth manager or advisor should be aware of. These are the following:
Robo advisors are one of the most popular tools in wealth management solutions. It provides clients customer’s personalized investment and wealth management options. The technology uses algorithms and machine learning as analytic tools to process customer and investment market data like investor goals, expected return income, and other investment choices for the best advice.
Customers have the opportunity to invest in increments against traditional investing through micro-investing. An investor can start with $100 or even smaller to buy stocks, EFTs, bonds, and other securities. It is typical to operate by a micro-investing team from an application or platform.
3. Cryptocurrencies and NFT
Cryptocurrencies and NFT are some of the popular answers today. A report has seen a projected increase in the number of crypto users that will reach 1 billion in 2022. And it is expected to grow by 21% in the next few years. Because of this, many European finance-related businesses support the development of
wealth management technology solutions.
Robo-retirement is a robo-advisor feature that monitors the user’s retirement savings. This technology help users select the most desirable retirement plan based on different investment offers and manage their savings in a more affordable and user-friendly way.
5. Digital Brokers
Digital brokers are online platforms in services that provide businesses and individuals with access to stock markets. It allows investing capital in different projects and assets in portfolios without my help from certified brokers. people are easily investing in stocks without brokers.
customers painlessly invest directly through the platform. The investment market becomes more accessible to wealth tech products like stocks trading, bond market, and others. They don’t have to pay higher trading fees but rely on digital broker advice and predictions.
6. B2B and P2B Investing
Some wealth management software offers numerous sets of investment and portfolio management tools for the B2B (Business-to-Business) sector. These products and services include research analysis tools, access to expert advisor networks, centralized assets management tools, CRM or Customer Relationship Management tools, and others. With the help of these features, weathtech companies can effectively automate and manage their work.
P2B (peer-to-business) investing allows a specific individual to invest in digital technology projects of a business firm.
Wealth tech investors are helping start-ups and small and medium enterprises (SMEs) to launch their dream projects by trying to invest in them through financial technology software.
7. ESG Investing
Users understand the value of their role in society, so they are keen to invest in ESG (Environmental, Social, and Corporate Governance) issues.
ESG Investment is a new investing trend that is quickly gaining popularity. Social responsible investing for ESG is also known as impact investing. In this investment option, clients focus on companies’ high relevance to environmental and societal responsibility roles.
A Yahoo Finance report reveals that the global social responsibility investing assets has increased from US$22, 893 billion in 2016 to US$35,301 billion in 2020. Big tech companies like Spotify and Facebook are among the top ESG investors.
Another survey reveals that the impact investment from millennials and Gen-Zers agreed that ESG factors are reasons they choose investing.
8. Adoption of Wealth Management Solution Tools
With the advancement in wealth management technology, wealth managers have also started adopting these digital changes. So they can offer their products and services in a personalized way. Wealth advisors begin to use these tools to meet up the demand in the market.
Wealth management software gives advisors data-driven recommendations, strengthens customer relation, and improve client onboarding by generating a more accurate analysis of their customers, their wants and needs, and more.
With these trends in mind, we know that you can get ahead with an expert financial tech team supporting you in attaining business success.
To know more about how wealth management software development works, you can reach out wealth management software development firm like Hexaview Technologies that will help you in developing a customized wealth management solution as per the needs and requirement.