Goal-based Fintech, a review of `Fintech Innovation

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Paolo Sironi, is an Italian, driven by demons that have led him to start companies, to write books, and earn thought leadership roles in wealth management — a member of the IBM Industry Academy.

“one would write a book only if driven by a demon whom one can neither resist nor understand” — George Orwell

Wiley, a unique publishing house more than 200yrs old, has traditionally had a significant presence in finance starting from academia and bridging over to practitioners, the Street, all the way to the “hoi polloi” through the Dummies series.

I am a Wiley published author myself, through two publications around Fixed income markets under the Frank Fabozzi series. Voila, my endorsement on the cover of this book Fintech Innovation: from Robo-Advisors to Goal Based Investing and Gamification

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In this book, Sironi identifies the direction that investing should be heading to. He aims first to take the pulse of the industry and then offer a holistic solution of Investing as a service, that should become the norm.

  • Robo-Advisors that are neither Robos, nor Advisors. Had you realized that? And if so, what is wrong with it? Are startups incorrectly positioned and/or are incumbents with robo solutions mis-using them?
  • Customers are pushing the transformation. We got, we know it but have we correctly identified the sources? Is it from Gen X, Y, Z or the HENRYs? Believe me, it does matter.
  • The service providers, the suppliers, are reacting! Love this chapter (Ch. 3 in Part II) because with 8 visuals you can capture the investment management industry through Sironi’s chosen filters. It all started back in the Italian Renaissance anyway. Where are we at now? Who is supplying these services? Through which “venues” and how have the customers been “segregated”? What are the products and how are they currently allocated and consumed?
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Sironi is pushing the envelope on what can and needs to be done to get the Customer Value of Financial Services engine working in the current era. His proposition is the implementation of Goal-Based investing (GBI).

  • What is Goal-Based investing? If you don’t know the three main reasons it hasn’t (yet) been accepted in the mainstream, you have to read Ch. 6. This ties into why MPT (Modern Portfolio Theory) isn’t actually reflected in portfolio allocations.
  • What is the MPT 2.0 version? Sironi presents the Probabilistic Scenario Optimization (PSO) framework.
  • How does a Goal-Based Investment reporting look like? Forget about expected returns and volatility tables and graphs! Do you want to know which goals you reached as a function of current performance? And in addition, what is the probability of reaching your future goals as a function of the performance of each (and all) asset?
  • How can we address effectively the behavioral issues around money? Dear suppliers of investing services (Financial advisors, Brokers, Online Trading platforms, and Robo-advisors) shift from product marketing strategies to designing a financial gamification platform that isn’t simply some rebate or reward.

A review of a book can never replace reading the book. A conversation about the book, after reading it, is the reward for the author and the value for the audience.

Written by

№1 Finance Global Woman Influencer by Refinitiv 2020 & 2019. Fintech & Blockchain Advisor: 30yrs FINANCE; #fintech #blockchain

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