The wealth management Barbell has conventional finance on the one end and Decentralized Finance (DeFi) at the other end.
We are seeing innovative products based on Machine Learning and Artificial Intelligence,  like the Goldman Sachs Motif Data-Driven World ETF (GDAT).
We are witnessing a forced re-bundling as fintech startups have managed to push incumbents to offer freemium wealth management services. The Robinhood effect will have a growing sample in 2020, following the Schwab — TD Ameritrade deal and the painful effects of it in the US RIA market.
Platforms will be the only sustainable business model. The creation of fuller stacks will be facilitated by the ample Fintech Saas and Baas offerings and APIs.
It will take, however, more time for us to get to the point of a ubiquitous digital financial dashboard.
The upgrading of the tech stack of existing wealth management firms will continue, as the sector has lagged. So, will the battle of Fintech Saas providers selling to asset managers and to their software providers.
CX is currently at a decent and improving level in several financial apps (we are approaching the point where CX will not be an X-factor). But the lack of interoperability between apps serving our financial life, makes for an overall lousy user experience, for which we have no one entity to point a finger at.
The race is on to build the first integrated offering in wealth management, which is modular and agile and for all needs in the West. VC is generously funding challengers like Chime to build such fuller stacks.
On the other end, DeFi is not user-friendly and needs 3–5yrs to penetrate the existing financial system. For 2020, we will see more conventional wrappers bringing to market DLT powered digital assets — WisdomTree ETP on SIX, futures, options of cryptocurrencies, and certificates with ISINs linked to the new alternative asset class. We will continue to see permissioned DLT architectures that will go live and at scale in specific domains (wholesale swaps, bonds, corporate payments etc). What started late this year with the launch of the world`s first mutual funds transactions network powered by DLT by Calastone, will continue. This is a DLT powered upgrade of middle and back stacks in wealth management. Fintech Saas and DLT upgrades will accelerate.
In 2020 we will see more investments from wealth management providers into technology companies that are focused on Streaming processing and Artificial intelligence. The process of cleaning up the huge amount of wasted data will start so that it can be used
A short version of this first appeared on Xtiva’s annual report with contributions from 20 top WealthTech influencers globally.