Patrick Schueffel - WealthTech: Wealth and Asset Management in the FinTech Age

WealthTech: Wealth and Asset Management in the FinTech Age

WealthTech: Wealth and Asset Management in the FinTech Age

Edited by

Patrick Schueffel

INFORMATION AGE PUBLISHING, INC.
Charlotte, NC www.infoagepub.com

Copyright 2020 Information Age Publishing Inc.

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, microfilming, recording or otherwise, without written permission from the publisher.

Printed in the United States of America

Library of Congress Cataloging-In-Publication Data

The CIP data for this book can be found on the Library of Congress website (loc.gov).

Paperback: 978-1-64113-848-2

Hardcover: 978-1-64113-849-9

eBook: 978-1-64113-850-5

Contents

Prefaceix

Patrick Schueffel

PART 1

Introduction

. Digitizing Wealth Management:

Marc P. Bernegger

. Is FinTech a Red Herring?7

J. P. Caldeira

. FinTech: The Genie Will Not Turn Back to His Bottle9

Raphael Cretinon and Jean Bonnefoy

PART 2

Technological trends affecting
wealth & asset management

.

Nicolas Buerkler and Helena Steiner

. WealthTechThe Brave New World?23

Alexander Tomenendal

. The Pitfalls of Investing 4.035

Hendrik Emrich

PART 3

Societal Trends Affecting
Wealth & Asset Management

. Democratization of Banking Services in Emerging Markets: Mexico41

Felix Cardenas and Maurizio Ballesteros

. Why Bitcoin Is Not a Currency but a
Speculative Real Asset47

Dietmar Peetz and Gregory Mall

. Millennials: The New Generation of
Wealth Management Clients57

David Gyori

PART 4

IT Management, Data Privacy and
Regulatory Implications

. The Regulation of Robo-Advisors65

Richard B. Levin, Peter F. Waltz, and Robert W. Wenner

. Regulating WealthTech and Robo-Advise in the EU73

Ulf Klebeck

. Protection of Privacy from Conception or Privacy by Design83

Nicolas Steiner

PART 5

Financial Risk and Performance Measurement

. How Can Robo-Advisors Help to
Enhance Investment Returns?89

Claus Huber

. Performance Watcher95

Nicholas Hochstadter

Part 6

The competitive landscape

. Cross Border Set Up of Crowdlending
Investment Funds101

Torsten Ries

. The Landscape of Robo-Advisor Operators
in the DACH Region109

Maryna Tykholoz-Cukov

. Doomed like Dinosaurs115

Patrick Schueffel

PART 7

The Wider Value Chain

. A Network of Experts is the Future of Asset Management121

Anna Schmid

. Decrypting the WealthTech Mindset127

Richard-Marc Lacasse and Berthe Lambert

. Cryptoasset Portfolios:

Floyd DCosta

PART 8

Product development and innovation

. How WealthTech is Re-Inventing the Customer Experience by Linking Open Innovation and Technology141

Daniel Fasnacht

. Venture Capital and Banks Investing in
Startups via Corporate Venture Capital147

Maurizio Ballesteros and Felix Cardenas

PART 9

Marketing and Sales

. Digital Family Office 2.0153

Steffen Bassler

. Strategizing about Robo-Advise157

Claude Diderich

PART 10

The Human Side of WealthTech

. Age of Discovery:

Dimitrios Salampasis, Anne-Laure Mention, and Alexander Kaiser

. A Call for More Case Studies on FinTech Innovation175

Wolfgang Amann

About the Authors183

v

vi CONTENTS

Preface

Patrick Schueffel

Digital transformation is creating game-changing opportunities and disruptions across industries and businesses. One industry where these game-changing opportunities will have profound impacts is wealth and asset management. For generations, wealth and asset management was a privileged service provided to co-operations and wealthy individuals. The informational advantages that wealth managers held vis--vis their clients provided a key competitive differentiator. In the current digital transformation climate, this differentiator is vanishing, and the setting is changing. A top priority on the agenda for any wealth and asset manager must therefore be how to respond and prepare for the ramifications of this fast-changing business environment. Thanks to the 25 contributions by 34 thought leaders of the asset and wealth management industry, this book provides the reader with a head-start in adapting to this new digital environment.

This volume is intended as the primary resource for the wealth and asset management technology revolution. It examines the rise of financial technology and its growing impact on the wealth and asset management industry. Written by industry experts in the global WealthTech space, this book offers an analysis of the current tectonic shifts happening in wealth and asset management and aggregates diverse industry expertise into a single informative volume. It examines the rise of financial technology and its growing impact on the wealth and asset management industry and is intended to provide practitioners such as wealth managers, bankers and investors with the answers they need to capitalize on this lucrative market. As a primer on WealthTech it furthermore offers academics clear insight into the repercussions of profoundly changing business models. It additionally highlights the concept of the ongoing democratization of wealth management towards a more efficient and client-centric advisory process, free of entry hurdles.

Aggregating facts, expertise, insights and acumen from many authors, this book strives to answer questions such as: Who are key players in WealthTech? What is fueling its exponential growth? What are the key technologies behind WealthTech? How do regulators respond? What are the risks? What is the reaction of incumbent players?

The wealth and asset management industry is facing a number of significant challenges: macro-economic pressures, market environment volatility, increasing and tighter regulations, rising cost structures, changes in client behavior and a changing client landscape, and, new entrants to the market. Wealth and asset managers must adjust to the new realities. Further complicating these challenges are new technical developments entering the industry.

The digitalization of the financial industry is displaying disruptive features which will have major implications for the entire wealth and asset management sector. Two facets of this disruption are particularly interesting: first, the qualitative changes of the wealth and asset management service (Will a Robo-advisor provide better advise than a human? What about the trust component?) and secondly, qualitative changes in the wealth and asset management industry (Can more people now receive wealth management services than before? Can asset management be provided more cost-efficiently?).

I sincerely believe that FinTech marks the beginning of a new era for the wealth and asset management industry. New technological trends in wealth and asset management, are shaking up the industry. In fact, on its own account WealthTech can now be defined as a new domain within the financial industry that applies technology to improve wealth management and private banking. Currently, the effects of these developments and their ramifications are unclear, and the path ahead is even less visible. This book will aim to fill the current knowledge gap in this area by addressing both of these elements. It is structured along the following 10 parts:

1. Introduction

   A tour dhorizon on FinTech and its impact on asset and wealth management will be provided along with a few critical remarks in this first chapter