Monday, 28 october 2019 | Redacción CEU
Global technology spending has experienced a meteoric growth in recent years. The fintech field is one of the most significant investment areas. This domain of the digital world may already be considered a well-established trend within the financial world. Consumers have gone from not knowing anything about this type of digital services to being increasingly familiar with the use of digital wallets, online banking, digital payment and collective funding. However, there is still much work to do in this new business environment. Fintech firms need to overcome many obstacles for the future expansion and standardization of their products, for example, combating the digital gap or dealing with the continuing threats in cybersecurity. Even so, many "tech" subsegments are gaining relevance within the financial sector. Today, in The CEU IAM’s Blog, we focus on one of them: "wealthtech". What does this new neologism mean?
Wealthtech is a digital finance services which is one of the least known by the general public. This concept refers to assets management by means of technology, both personal and professional. Wealthtech can also be defined as an ecosystem of digital tools that use new advances in innovative fields like big data or machine learning with the aim of generating wealth. It is a new alternative that seeks to transform the investment, advice and wealth management model.
The arrival of fintech companies has served as an incentive to traditional banking. These firms have helped to boost a sector that had until recently been characterized by preserving certain rigidity and immobility in its forms. These new business models are agile, simple and innovative, so they lead banks to adopting a new perspective, even to reinventing themselves. Wealthtech companies have identified one of the weak points of banking: its low capacity to offer value in a personalized and accessible way to all types of profiles.
The projects of companies specializing in wealthtech use platforms and applications with intuitive designs, with which users can access tools for management, investment, savings or advice. Regardless of their purchasing power, customers can access these types of services quickly and easily. This is the reason why some people say that this subsegment of the fintech world is contributing to democratizing the private banking sector. On the other hand, one of the great challenges of wealthtech companies is to win over customers with higher incomes, as this is the strongest point of traditional banking.