1、Future of Finance2Contributors41Table of contentsThe Future of Wealth Management3Michael Stemmle,Nils Frowein,additivSeizing the wave of accelerated transformation6Ian Stewart,Executive in Residence at IMD Not losing the forest for the trees9Amelie Janssens de Bisthoven,NS PartnersAchieving loyalty

2、in a fast-moving market11Tim Delahunty,Commonwealth Bank IndonesiaIn the future,all investing will include some measure of sustainability14Sabine Dbeli,Swiss Sustainble FinanceWealth as a continuum:building a platform for growth17Deanno Basas,ATRAMThe future of finance is just like the past deliveri

3、ng what the market needs20Ali Alqaraawi,Aljazira CapitalThe future is now,but are you ready?22Christine Schmid,additivA rising interest environment underlines the need forinnovation in the German investment market24Carsten Kroeber,bevestor The future of finance is open and connected27Patrick Frith,T

4、arabut GatewayEducation is a key component of broadening access to wealth management solutions30Philipp Merkt,PostFinanceEmbedded Wealth:An Overlooked Opportunity?35Robert Ruttmann,Redesigning Financial ServicesBuilding a Case for Wealth-as-a-Service37Jean Sullivan,CelentPrepare for more knowledgeab

5、le clients39Marco Borer,F2B Digitalization&InnovationFinance could be more inclusive,thanks to digital assets33Julian Sawyer,Zodia3A consensus emerges”The future of finance is just like the past delivering what the market and clients need”,highlights Ali Alqaraawi of Aljazira Capi-tal.And future inn

6、ovation is not a synonym for technology.Rightly adopted and combined into new client experiences it enables change.But ultimately its combination with social,demographic and sustainable economic needs will drive success.Thus,the pieces focus on the demographic,macroeconomic and technological changes

7、 that will have a long-term impact on the business models behind wealth management as highlighted by Christine Schmid.DemographicOur world faces two big demographic changes affecting the wealth management industry.The first is ageing populations.As populations in developed coun-tries age,both the su

8、pport ratio has decreased(number of people working to support pensions for previous generation)and life expectancy has increased.This leads to a situation where pen-sion schemes are chronically underfunded.The future of wealth management(and well-functioning societies)depends on solving this challen

9、ge.Technology,such as AI,will help,so will business model change,especially embedded wealth management or what Celents Jean Sullivan calls Wealth-as-a-Service(WaaS)and whose opportunity is highlighted by Robert Ruttman in our report.On the other end of spectrum,we have the rise of savers and mass af

10、fluence in developing countries with younger and digital native populations as well as the transfer of wealth within developed countries from one generation to the next.This creates demand for modern,scalable,automated and new advice assisted offerings for wealth management,or as Tim Delahunty of Co

11、mmonwealth Bank put it“we need to have a seamless customer journey offering to forge deeper relationship by serving customers better”.Philipp Merkt,PostFinance Tim Delahunty,Commonwealth BankThe Future of Wealth Management“The pendulum has swung away from an imagined future of high automation to a h

12、ybrid of human and digital in concert.”“I believe we need to create a seamless customer journey offering both the human touch and digital convenience.”4Yet it also has wider implications in terms of transparency,loyalty,and sustainable investing.As Sabine Dbeli state“sustainable investing will deliv

13、er on its promises of better investment perfor-mance with better outcomes for the world”.MacroeconomicInflation and higher interest rates are returning after a period of secular decline.This affects asset prices,yields and allocations across the board,from real estate to growth stocks to alternative

14、 investments such as collectible,and the wealth management industry needs to adapt.At the fully automated,low end of the wealth management sector,the growth of robo-advisors and passive investment products appeared at a time when savings accounts had low or even negative yields(such as in Switzerlan

15、d)and as interest rate rises are passed on to retail bank deposits these products will have to evolve to differentiate,as commented by Carsten Kroeber“the answer lies in continuous innovation”.Macroeconomic trends will affect allocations to specific asset classes,but secular trends will see short te

16、rm reversals which will affect opportunities and timing to bring new wealth management products to market.TechnologicalThe explosive growth and rapid evolution of Artificial Intelligence delivers a technology solution that lends itself to the partial au-tomation of high touch processes.AI driven sol

17、utions are good at the kinds of things that are perceived to be very human,vs the highly deterministic,robotic,processes driven by systems encod-ed in traditional software logic.This could theoretically accelerate the decline of the relationship manager in wealth management,but most commentators cle

18、arly believe it will enhance the human.Interestingly,Marco Borer calls out the need for wealth managers to prepare for more knowledgeable clients as their adoption of generative AI is likely to accelerate.Digitalization over the years makes it easier for clients to find information,and AI will likel

19、y help them comprehend it all.”Marco Borer 5“The hardest challenge for financial institutions in this new paradigm shift will be cultural,not economic or technological.”There are other technology innovations discussed by our contributors,such as the impact that crypto and fractionalized ownership co

20、uld have on wealth management commented by Julian Sawyer,and many,in-cluding Patrick Firth also comment on the reinforcing role of open tech-nologies with open banking leading to a more ecosystem-based version of wealth management.This ultimately results in a single platform approach as Deanno Basas

21、 explains for the Philippines,connecting own and third-party distribution channels.Moreover,as Amelie Janssens,opines,challenges may well lie more in the cultural difficulties in affect-ing change compared to technology.The one thing that is indisputable is that the pace of change in wealth man-agem

22、ent is accelerating.As Ian Stewart asked,is your organization ready?Amelie Janssens de Bisthoven,NS PartnersNils Frowein CEO,additivMichael StemmleFounder,additivThank you to our contributors6We live in a time of great change,both the number of things changing and the pace of that change.At the mome

23、nt all the buzz is about the use of big data and ap-plied machine learning,generally inaccurately referred to as Artifi-cial Intelligence(AI).And it is true that the promise of this current version of AI is a kind of augmented humanity where we will be able to deliver more services to more clients w

24、ith fewer staff.But that isnt all that is going on.There is the potential of blockchain and what it might do for the nature of money and financial transactions.There is the increasing power of portable technology that puts the computing power of the world in your pocket or on your finger.There is 3D

25、 printing which has greatly reduced the cost of prototyping and therefore speeded up the development of hardware in a multitude of sectors.There is the interconnectedness of smart machines(IoT)reducing the need for human oversight and maintenance in complex systems.And which in turn is combining wit

26、h AI to create autonomous mobile systems which already run people-free factories and warehouses around the world greatly improving supply chain logistics and lowering both costs and the need for workers.And let us not forget the advances in medical science and medical technology that promise to exte

27、nd and improve lives across the globe.Seizing the wave of accelerated transformation Ian Stewart Executive in Residence at IMDThe promise of this current version of AI is a kind of augmented humanity where we will be able to deliver more services to more clients with fewer staff.7Then there are the

28、challenges of:A war in Europe.Energy supply and transition(associated with concerns about global warming and sustainability).The apparent threat of more pandemics.A new cold war between new(China)and existing(US+)powers.A struggle within the West to have reasoned fact-based debate about a multitude

29、of societal and political issues,which will lead to more political unrest and might lead to more physical conflict.Ongoing political strife in much of the global south.Source:https:/ 0100102104106108500100015002000250030003500Number of UsersDaysAnd I am sure there are a bunch on both the opportuniti

30、es and challenges sides I have missed.Let me underline how I started:we are living in a time of GREAT change which is likely to lead to great changes in the way we live.This has happened before.One similar period was the Industrial revolu-tion of the mid-18th century,when people moved out of village

31、s and off farms and into factories and the big cities.Another was the beginning of the twentieth century with the arrival of electricity,the telephone and the au-tomobile which dramatically changed the way we lived and conducted busi-ness and conducted wars.The difference now is that while the magni

32、tude of change may be similar,the speed of change is accelerated.Society adapted slowly to changes such as the printing press or urbanization,whereas social media gained near universal adoption in less than a decade.User uptake of new technologies#of days to 1 million and 100 million users by techno

33、logy8So,whats next?I am not about to make prognostications about the future,there are too many vari-ables.But history provides perspective on the magnitude of change we can expect.In this context,we can see threats from AI augmented Private Wealth Management competitors and purely technology-based c

34、hallenger banks are the least of your prob-lems.This is a level of change that has not been seen in a century.And the duration of companies on the Fortune 500 has already been falling for 100 years.We are going to witness wholesale changes in industry and society.Converyor belt in the first humanles

35、s factory in Shanghai,ChinaFor me it is a period of great optimism and excitement.For incumbent financial ser-vices companies,it is a time when you need to make sure you have processes in place ready to monitor and proactively deal with that change.This means wholesale change across technology,organ

36、ization structure,but above all,culture.It wont be enough to react.And you can no longer rely on reputation and trust to protect you.We have seen how quickly Silicon Valley Bank and Credit Suisse lost trust.We have also seen how easily Apple has been able to transfer trust gained in hardware and sof

37、tware across to servic-es including banking.This next ten to twenty years is going to be genuinely transformational.Source:9Lets imagine you approached your bank 50 years ago because you needed a loan to buy a house.You would have met the local branch manager,who probably would have worked in that b

38、ranch his whole working life,would have known the property and would have known you.A decision would have been taken in a single in-face meeting.No complicated forms.No risk model.No weeks of waiting.Fast-forward to now and we would all agree banking has be-come much more impersonal and systemized,b

39、ut were led to believe that this was the price to pay to extend banking provi-sion to everyone.Embracing the PotentialWell,whether we could have done things differently in the past,it is certainly the case that technology now allows us to do banking differently.Moreover,I would argue that we must em

40、brace this opportunity if we are to meet the needs of the various stakeholders in relationship banking and re-establish our sense of purpose.Take clients,to begin with.So often we have put customers into broad categories,based on demographics(millennials,entrepre-neurs,women,etc.)and risk appetite,w

41、hen each client is differ-ent and requires a bespoke service.Similarly,we have pushed“self-service”as a virtue when every client needs the right guid-ance to make the best financial and commercial decisions.the technology imperative to re-establish a sense of purposeNot losing the forest for the tre

42、es:Artificial intelligence presages a world where we can treat every client individually at scale.Amelie Janssens de Bisthoven Head of Business Intelligence,NS PARTNERS10And while we have opened up ESG investing options,we must make sure we give clients a sense of where their money is going and the

43、impact it is having.As an industry,we also have a growing recruitment challenge.It is increasingly evident that there has been a generational shift.Younger team members want a different em-ployer-employee contract,they want more meaning in their work and a different work/life balance.This makes it h

44、arder to recruit,harder to retain,and harder to engage with them than previous generations.But there are good reasons to be optimistic.The path,paved with technology,to more meaningful outcomes for all is increasingly clear to see.The step-change we have been witnessing in artificial intelligence pr

45、esages a world where we can treat every client individually and provide the right advice at scale,and where employees can be increasingly liberated from mundane tasks,such as manual record-keeping,to focus on value-adding,client-facing,activities.Paradigm shift will be culturalThe hardest challenge

46、for financial institutions in this new paradigm shift will be cultural,not economic or technological.We need to break down organisational silos,to free up the non-sensitive data for generative AI,but also to deliver on a common goal to provide the best solutions to our clients,which requires a ho-li

47、stic,not solely relationship manager-led,approach.Furthermore,we have accepted that the compre-hensive solutions are unlikely to be provided by our organizations alone.We need therefore to foster ecosystems of partners whose services we can use to augment our own and work together to form the right

48、utilities and standards.Open banking was the first stop,but open finance is the destination.As an industry,we need to see the forest for the trees.Technology is becoming increas-ingly powerful,but we need to use it,not for its own sake or to do things more efficiently,but to reimagine how we connect

49、 with our clients and colleagues.To re-establish our common sense of purpose.We need to use technology to reimagine how we connect.To re-establish our common sense of purpose.11If youd asked me five years ago about the future of wealth man-agement,Id have said it was fully digital,with the key value

50、 drivers being all about democratising access.But now,Im not so sure.Its true that in some markets,financial services have become largely transactional-in a few clicks,you can buy insurance,open a term deposit,or switch bank accounts.As a by-product of this,I feel loyalty is the trade-off and custom

51、ers go to the provider with the lowest prices,best promotions,or easiest processes.Although there is no doubt this works for some products in some markets,I feel following a digital-only path may be a race to the bottom for wealth management in Indonesia.Challenging customer loyaltyIn Indonesia,the

52、issue of customer loyalty is as challenging as anywhere.The economy is growing rapidly and so is the emerging middle class and competition generally.The middle class is statistically young,digitally savvy,and aspirational.Further,the middle class has a level of disposable income that prompts them to

53、 think about financial planning and invest-ments.At the same time,the penetration of investment servic-es is still low.There are huge opportunities,however moving this opportunity from a PowerPoint deck into reality isnt that easy for start-ups and product innovators.I see that when the potential pr

54、ofit pool is big,you get an over-supply of solutions.In markets like Indonesia,customers are not short of choice and have little incentive to be loyal.You can see this when booking a ride-share or taxi customers will often have two apps running so the cheapest fare can be selected.Achieving loyalty

55、in a fast-moving market Tim Delahunty Director of Tech,Ops and Finance at Commonwealth Bank IndonesiaWe need to understand where the customers digital journey ideally starts and stops,where our customers value human interaction and how we can incorporate both.12And its the same with banking and weal

56、th platforms.Indonesians in their twenties and thirties might have four or five bank accounts,each with different incentives in different stores or based on different types of transactions.They compare cashbacks,vouchers,free transactions,and interest rates and have no problem switching or opening n

57、ew ac-counts to get a better deal.For a financial services provider,this makes the economics difficult even if you have a vertically integrated business model.Yes,we can offer promotions and discounts,but historically these were a single acquisition cost to kick-start a long-term relationship.If we

58、now have to pay for every customer interaction,it becomes a very expensive business.We might force some loyalty through habit,but thats different to the trust-based loyalty you get from an actual relationship,and in my view it isnt sustainable.Age 18-25Age 26-30Age 31-40Age 41-100Source:Indonesia Ce

59、ntral Securities DepositorySID=Simple investor identification in thousands*)%Growth since 201650150250350450550650750850950202120202019201820172016450969 SID545 SID558 SID557 SID281+1.300%*+772%*+329%*+118%*885340551302331951101095551562545763134Investor Growth in IndonesiaIndividual investors are r

60、apidly accelerating due to the young tech savvy population13So,how do we forge deeper relationships?Firstly,I believe its a longer game where convenience(i.e.digitisation and ease of access)is the enabler,but relationship and knowledge is the point of differentiation.If I want a nice bottle of wine,

61、I dont go to Indomaret(or 7-Eleven),because convenience is not my top value driver in that interaction.Instead,I go to a bottle shop I trust,and can help me find the best bottle for my price-point and tastes.Next time I want the same bottle,I can buy it quicker because I know what I want and where t

62、o get it.In this example,buying the bottle quickly or convenient-ly is not my first goal,buying something I enjoy for the right price is the desired outcome.Convenience becomes my value driver some point later.Building a new effortless pathI used to believe the primary goal of technology should be t

63、o remove human interaction in order to maximise the value of the expensive digital tool youve built.However,when it comes to more com-plex financial interactions,my view has definitely changed.I believe we need to understand where the customers digital journey ideally starts and stops,where our cust

64、omers value(or need)human inter-action and how we can incorporate both.For our customers,investing in wealth management can be complex,especially for those that havent done so before.The leap from exploring wealth products to executing a trade can be big,both financially and emotionally.Making wealt

65、h management truly acces-sible means addressing both,yet technology alone may not be best to do it all!In summary,I believe we need to create a seamless customer journey offering both the human touch and digital convenience.Understanding that human interaction is valued at some parts of the journey,

66、at some times,for some customers,and in other times digital solves for ease and accessibility.If we can crack this,we make better use of our digital platforms for the purpose for which they provide the most value.As a result,we give ourselves a chance to serve customers better-deepening our customer

67、 relation-ships for the long journey ahead.We need to create a seamless customer journey offering both the human touch and digital convenience.14The world of sustainable investing is at once nuanced,ill-de-fined and open to abuse,but it is not flawed,and its impor-tance will continue to grow.Everyon

68、e can point to apparent anomalies in ESG rankings.Elon Musk is frustrated that Tesla,an electric car company helping to lower CO2 emissions,has a worse ESG rating than Exxon,an oil company,and cites this as evidence that the whole edifice of sustainable investing is flawed.The problem of seemingly a

69、rbitrary ratings is not helped by a lack of definitions.There is no standard definition and,even where regulators,such as the EU with the recent Sustainable Finance Disclosure Regulation(SFDR),have introduced legislation to help,they still fail to define when an investment deserves to be called sust

70、ainable.Regulators need to be careful to clarify,not cloud.5,02040.4K294.6KElon Muskelonmusk6:09 PM May 18,2022Exxon is rated top ten best in world for environment,social&governance(ESG)by S&P 500,while Tesla didnt make the list!ESG is a scam.It has been weaponized by phony social justice warriors.I

71、n the future,all investing will include some measure of sustainabilitySabine Dbeli CEO of Swiss Sustainble Finance15Defining goals to judge achievements The starting point for assessing sustainable investing,the technical term for which is ESG investing,should be to define goals.Roughly speaking,sus

72、tainable investing addresses one or all of three possible goals to:align investing with an investors values;improve risk/return;and/or,create a positive impact on the world.The clearer investors are about their goals,the better they will be able to judge achievement and to report accurately.For inst

73、ance,if an investor attaches primacy to owning stocks which have a positive impact on the environment vs.improving their risk/reward,then Exxon may indeed be a worse stock pick for them than Tesla.It is a misunderstanding about sustainable investing goals that gives rise to many allegations of green

74、washing,much as careless communication does the same.We still have a long way to go with transparency.So much of the data on which sus-tainable investing is based is company-reported,based on checklists,but that is changing.We are seeing more standardisation emerging and new data providers enter the

75、 space,capitalizing on technology changes such as AI,to be able to track a greater number of objective data sources.1ESG-mandated assets are projected to make up half of all professionally managed assets globally by 2024Global assets under professional management($trillion)Source:Proportion of ESG-m

76、andated data through 2020 from Globl Sustainable Investment Alliance;DCFS analysis through 2025,Deloitte Insights,2020$180$160$140$120$100$80$60$40$20$02014$19$452016$50$192018$53$272020$69$392021E$71$462022F$72$552023F$72$672024F$71$802025F$69$96ESG-mandatedNon-ESG mandated2316Sustainable investmen

77、ts influence continues to growRegardless of current limitations,sustainable investing has a profound and growing influence over asset allocation.In Switzerland,we estimate that today half of all invest-ments include at least some measure of sustainability and,according to Deloitte,this should be the

78、 case across the world by 2024.Its influence increases thanks to many factors,such as a growing interest from asset owners to improve investment decisions and the effect of younger,more socially and environmentally conscious,investors controlling a greater proportion of the worlds assets.In Switzerl

79、and,we estimate that today half of all investments include at least some measure of sustainability and,according to Deloitte,this should be the case across the world by 2024.Sustainable investing improves risk/returnA sustainable approach to investing is also,in our view,integral to improving risk/r

80、eturn over time.Like all investing,there will not be blanket approaches to sustainable investing.Depending on an investors goals,they will include or exclude criteria,which will change performance.But,everything else being equal,sustainable approaches should lead to better risk/return than tradition

81、al approaches by taking into account,and placing a higher weighting,on more aspects,such as the risk of stranded assets.Misunderstood and often maligned,sustainable investing will deliver on its promis-es of better investment performance with better outcomes for the world.Regulation and other factor

82、s may slow or accelerate its progress,but it is here to stay and growing in importance.170-1920-2930-3940-4950-5960+We may be living in uncertain times,but what is certain is that the wealth industry is going through dramatic changes.In the Phil-ippines we are very aware of a need to con-tinually ad

83、apt and have the freedom to grow.Our economy expanded by 6%in 2022 and this swift development is expected to con-tinue.Like many who are set to become an upper middle-income country,we are seeing increasing urbanization,a growing middle class,and a large,young population.Servic-ing this population p

84、roperly with the wealth solutions they need is essential.Supporting wealth inclusion is crucial.Simultaneously,we must continue to ensure the best for our established High Net Worth Individual(HNWI)client base.Its a difficult conun-drum at a time when margins are being squeezed.Nonetheless,it is pos

85、sible.Bringing it all together for efficiency and scaleTo service clients evolving needs efficient-ly,we must move away from the traditional model of building auxiliary services.Wealth as a continuum:building a platform for growthDeanno Basas CEO ATRAMA large,young population and expanding economy h

86、as created the need for new wealth solutions in the Philippines.Source:Oxford Economics;World Bank*Percentages may not add up due to rounding.201720222025203042%39%38%37%17%15%17%15%11%12%9%11%9%10%18%17%15%11%9%9%14%11%7%7%107115123130Philippines:Population by age million(volume of age)+3%+6%Philip

87、pines:Gross domestic product(GDP)$billion2017202220252030315406489691+7%18Servicing differing segments alongside primary offerings on separate systems isnt efficient.This can be overcome by adopting a single platform approach.Creating a continuum,supports not only a clients move towards the wealth s

88、egment but also achieves optimum scale efficiencies for wealth providers who want to service retail,premium(mass affluent)and HNWI client groups.A digital platform should enable wealth providers to launch smart,engaging,and highly personalized wealth and investment services.Furthermore,with a single

89、 plat-form approach,for those managing multiple segments,new functionality and changes can be easily replicated.It doesnt make sense to build individual solutions/plat-forms/products.Instead,you can offer a whole suite of products on one platform,with different capabilities,which can be turned on as

90、 the case may be.Making them available quickly and easily at once to all segments or sub-brands where required.Adapting to differing client needsOf course,different segments have specific needs.For example,giving retail clients a recommended portfolio based on their goals and risk profile.This can t

91、hen be copied and offered to those within the premium seg-ment,but with more sophistication;providing more in-sight and guidance whether its a discretionary portfolio,directional portfolio,or an advisory portfolio.Self-service and advise led on the same platformThe same may also apply to determining

92、 bespoke scenarios.For example,for opti-mum investment decisions and to manage investment risk,a HNWI may prefer to be managed by an advisor.With a single solution,differing advice channels can be of-fered(self-service,advisor led or a hybrid of the two)and managed seamlessly as one service or relat

93、ionship management team.Of course,this doesnt mean that clients dont still have direct access where appropriate.At ATRAM,our HNWI clients often like to meet our advisors face to face when estab-lishing a relationship,it helps to build trust.They can still come into the office;having one platform acr

94、oss multiple segments compliments our offering but still allows us to follow the practices that our clients expect and need.It gives us more options and removes functionality and product offering limitations.Theres no need to reinvent everything from scratch.You take whatever you have there and appl

95、y it within the requirements of the market now.19A single platform also provides a full picture across multiple segments.When lev-eraged with client insights,this can support client behavioural analytics to facilitate cross-sales and up-sales opportunities as well as cross-segment movement and clien

96、t retention.Extending the single platform approach to distribution channelsAs well as replicating functionality,products and solutions across different custom-er segments or businesses,these offerings can also be made available by external brands through an embedded finance model.Open finance(which

97、is in its early stages in the Philippines)enables this by utilizing APIs.In the Philippines,for example,one model that we believe will emerge is registered financial planners who want to offer a broader set of wealth services.These players already have an established business model in the UK,and a s

98、ingle platform like ours can offer them this breadth without having to build the platform or access the products individually from multiple sources.Ultimately,by utilizing a single platform,all parties win.Wealth providers,gain greater client insights and can easily replicate and launch solutions qu

99、icker.This is all while achieving economies of scale enabling them to offer a richer,cost-efficient client ser-vice and range of products.In essence,a single platform enables a holistic approach to wealth available to all,and isnt that what offering value and serving clients efficient-ly is all abou

100、t?Ultimately,by utilizing a single platform,all parties win.Wealth providers,gain greater client insights and can easily replicate and launch solutions quicker.20Before starting at Aljazira Capital in 2021,I had never worked in finance and had little experience in investment and financial firms exce

101、pt as a client.What I did know is that,like any business,its about meeting customers needs and helping them to solve prob-lems.Technology changes things,but not that key aspect.Our primary challenge in the Saudi market we need to get people to save.Since Crown Prince Mohammed bin Salman launched Sau

102、di Arabias Vision 2030,hes been talking a lot about saving.It hasnt been part of our culture in the past,but now we need to promote it and provide the right and trusted tools and mechanisms for it.The future of finance is just like the past delivering what the market needsAli Alqaraawi COO of Aljazi

103、ra Capital10.4%4.7%6.0%2,2402,4242,5882,7622,9463,14226%17%57%202216%56%27%202316%56%28%202416%55%29%202515%55%30%202615%54%31%20277.0%Source:BCG Banking Pools,SAMAPublic sectorCorporateRetailExpected Deposit Growth in Saudi ArabiaDeposit volume(SAR billion)Our primary challenge in Saudi Arabia we n

104、eed to get people to save.21The younger generations need to have it at the forefront of their minds and not depend on their families.Its our job to help them to do that.And,as this is part of Vision 2030,our industry has some specific targets and KPIs that we need to meet.Our challenge:Trust,technol

105、ogy and collaboration In our market,you need to be a trusted name with trusted people.Customers,especially new savers,need to be comfortable that their money is safe.Additionally,they also haveto be completely sure that its invested in a Shariah-compliantway.This is very important.Then,we use techno

106、logy to help people save and invest as easily as possible.At Aljazira Capital,were expanding from brokerage into investment and asset management,as well as opening up to a wider retail market.This means developing a new digital platform where people can open accounts,learn about their risk profile,s

107、ee simulations and start saving and investing.Were working with additiv,and adding new requirements and features all the time.Innovation is not synonymous to technology In fact,we find that this kind of project isnt about buying a piece of technology,its about customizing and evolving a unique and i

108、nnovative solution over time,in addition to pro-moting savings and investment culture for national development.Therefore,the more feedback we integrate,the better the solution gets and the more it matches what our market needs.Im also a big believer in embedding finance and wealth management with th

109、e wider ecosystem via different channels,including e-commerce and social media.Thats already happening in other markets.Well keep exploring all these ideas and moving forward.Finally,we come to collaboration.In just a few years,weve seen significant number of banks,investment companies and fintechs

110、getting involved in the Saudi market and we welcomeit.We dont believe in monopolies and that isnt what our market needs.Compe-tition makes us work harder!And we also need to remember that were working towards a shared goal,to create a saving culture.So,for us,the future is about collaboration as wel

111、l as competition.We use technology to help people save and invest as easily as possible.22What a time we live in.We are experiencing a high level of uncertainty for the economy.Effects of multipolarity,high(er)inflation,rising social costs and the need to com-bat climate change,combined with the end

112、 of the freedom dividend.Additionally,the USD as the leading global curren-cy is under question.Increased call for new financial system With inflation,and resulting rising rates,bank earnings have not only been supported by rising net interest income,but also questioned by mark to market losses on i

113、nvestments and a looming credit cycle.Unsurprisingly,we are seeing re-newed concerns that we may face another phase of finan-cial instability.This has already resulted in a digital bank run for those banks most exposed and banks most questioned,at a speed and size unseen before.With rising rates,sav

114、ers switch to interest bearing money market instruments that repriced faster.As a result,the de-posit base was falling and with it the ability for banks to grant loans And given that deposits are the cheapest funding category,the associated costs to grant a loan will likely rise beyond the effect of

115、 rising rates.The US is affected,especial-ly in view that a domestic credit crunch could be possible.To address these challenges,we need a new financial sys-tem.One that leverages where the world is moving to limit climate change,to stabilize economies and ultimately to democratize finance.The futur

116、e is now,but are you ready?To address todays economic,social and environmental challenges,we need a new financial system.Christine Schmid Head of Strategy,additiv23Hey tech,it is time to build and innovateWhat we experience today are the“Limits to economic Growth”.50 years after the Club of Rome pub

117、lication,which discussed the possibility of exponential econom-ic and population growth,the negative effects of the consumption of finite earth resources are evident.As predicted in the paper,the technology solutions are becoming more visible.Regardless,we need sys-temic changes in the economy and s

118、ociety to support the adoption of these technologies and to address the root causes of unsustainable growth.Innovation which is technology driven is picking up more than ever and will shape the way we live and how we pro-duce and consume financial services.With respect to the finance sector,the most

119、 prominent developments pending include:%consumers inclined to takeinvestment services fromfinancial service providers(ie.banks)vs non-financial brands(ie.non-banks)Non-BankBank56%44%Source:additiv consumer survey,2022 The further breakup of the value chains in finance and the rise of Embedded Finan

120、ce will drive the adoption of financial services globally:This allows businesses(financials and non-financial alike)to offer their customers a seamless,end-to-end experience that includes financial transactions,without the need for the customer to leave the channel.Artificial Intelligence,combined w

121、ith embedded finance opportunities,will overhaul the relationship heavy finance parts such as wealth,financial planning,credit,and insurance.Artificial Intelligence has the potential to revolutionize finance:Better decision mak-ing,personalization to meet consumer needs at scale(in wealth,financial

122、planning,or credit),a new level of efficiency for the banks and insurers(in particular in risk manage-ment,regulatory and legal teams)and expanding the advisor know-how are just some of the low hanging fruits we can imagine today.Stablecoins and blockchain will disrupt the payments industry and chan

123、ge the wealth industry in the longer run:Their application results in improved transparency thanks to record keeping,cheaper transactions as intermediaries are avoided,and rising finan-cial inclusion rates as decentralized systems reach todays unbanked.Clearly regulatory boundaries and rules are how

124、ever needed first,as discussed on government levels.24Germans are famously cautious when it comes to investing money.Germanys household savings rate was 24%vs.avg.18%in the EU(Eurostat,2021).Nevertheless,till now very little of that money finds its way into investments,whether shares or fixed income

125、 or other alternative investments.In other words,Germans do save a lot but tend to keep their money in savings accounts or short-dated securities.Therefore,it is difficult to convince Germans to invest their money in investment funds or stocks,and the challenge has got even more difficult in a high-

126、er interest rate environment because people see themselves getting a positive return on their savings again using saving accounts or fixed term deposits.A rising interest environment underlines the need for innovation in the German investment market Germans do save a lot but tend to keep their money

127、 in savings accounts or short-dated securities.Carsten Kroeber Managing Director and CTO of bevestor,a German robo-advisor owned by DekaBank Source:Deutsche Bundesbank,2023Financial assets in German households,2022Currency and depositsTotal assets:Debts securitiesShares and other equityInvestment fu

128、nd sharesInsurance,pension and standardised guaranteesOther accounts receivable42.9%7,254 billion1.7%12.1%11.7%31.2%0.4%25The savings volume in Germany remains high.However,in recent years,its evident that trust in securities remains and growing steadily.Investors know that if they want to build up

129、wealth over the long term or make provisions for their old age,they cant avoid saving on securities.Regular saving over a longer period is particularly use-ful in times of crisis.The long-term investment story of saving with securities remains intact and the securities culture in Germany is progress

130、ing.The answer lies in continuous innovation The solution to convince people to invest in new opportunities is driven by continuous innovation and digitization,to offer flexible/customized,easy to use platforms to invest money by giving the client a maximum of transparency based in low fees.The mark

131、et for automated investments,or robo-advisors,has been around in Germany since 2012.What is interesting is that the most successful companies,today,were not the early movers.Those that have continued to prosper and gain market share are those that continuously innovate,those who constantly release n

132、ew features and expand their offering.And innovation will be more important than ever since our substitute good,savings,have become more attractive while keeping technology easy to use.The key to innovation in this market is to think less about ones own business and more about hearing the customers

133、voice.Direct client feedback is the silver bullet to being aligned to their needs.What features are you missing on our platform?What would you like to have?Would you like round-up saving whenever you buy a cup of coffee?1 Incl.other volume changesSource:Deutsche Bundesbank,2023-20-100+10+20+30+40Cur

134、rency and depositsAcquisition of financial assetsValuation effects1Debts securitiesShares and other equityInvestment fund sharesInsurance,pension and standardised guaranteesOther accounts receivableChange on 3rd quarter of 2022 by instrumentFinancial assets in German households,202226Do you need ret

135、irement plans or accounts for your kids?We evaluate all the pos-sibilities.We at bevestor also continuously learn who our customers are and what they expect.For example,when we first launched our digital solution,we set out thinking that wed be targeting a young market,but it isnt just the younger p

136、eople who do everything with their smartphone-a third of our customers are over 50.The target group is not just digital natives.The importance of choice remains high Equally important is the adaptation of investments to specific needs and financial possibilities.For exam-ple,our customers can indivi

137、dualize their portfolios to invest in current topics such as artificial intelligence or water.At first,we thought this might be seen as a mar-keting feature to differentiate from other Robo-Advisors.Now we know that more than 80%of our customers choose one of these thematic options.Sustainability is

138、 also important 50%of our new customers prefer ESG portfolios over standard portfolios.Even though people want the convenience of a robo-advisor,we need to re-member that these are people with individual preferences this requires a more detailed offering for customers.A competitive and cooperative f

139、uture Competition is not just coming from interest rates.We are likely to see new entrants into the investment mar-ket or at least new distributors of investment products.We see retailers getting involved,letting customers redeem loyalty points through investments in ETFs,and giving loyalty points o

140、r cashback to people who invest a thousand euros through our platform.These could be competitors,drivers of new developments,or they could be partners,we dont know yet.The only thing we do know is that to keep growing,we must continue to innovate while keeping an eye on usability and easiness of cus

141、tomization.It isnt just the younger people who do everything with their smartphone-a third of our customers are over 50.27Its ironic.Banks spent most of the last 30 years trying to keep our data safe by locking it up in expensive internal IT systems.Then,the EUs PSD2 and the UKs Open Banking standar

142、ds,which quickly cascaded to other regions,turned that complete-ly on its head.The ability to securely share and update account information and make bank-to-bank payments gives rise to countless ideas and opportunities.What weve seen so far is only the start.The future of finance is open and connect

143、edPatrick Frith VP of Partnerships at Tarabut GatewayStatus of Open Banking Legislation Around the worldUnder discussion/PlannedCurrent review/In progressEarly implementationEffective implementationStalled/No actionSource:Based on Platformable report,Q3 202228The true power of open banking lies in t

144、he genuine problems it can solve As consumers,it could make our lives a lot easier.Loan and mortgage applications neednt be painful and time-consuming.Instead,you could just agree to share your banking data and boom!The application is done!Open pensions and open insurance could follow.I think well s

145、ee this develop rapidly,to the point where everyone has their own digital footprint that they can share with financial and non-financial providers.In regions like the Mid-dle East,this is very close to happening.Were used to think of personal data in a negative way,as something that can be attacked

146、or mis-used.Open banking can change that perception and help us see it as a powerful tool that we can leverage for our own benefit.Open banking is equally exciting from a business perspective Firstly,payments are becoming cheaper.It makes no sense for a small business to pay 200 basis points just to

147、 accept a payment.Apple Pay and Google Pay have done well to create seamless consumer journeys,but they are still facilitating card payments,involving multiple intermediaries and their fees.Bank-to-bank payments remove those intermediaries altogether.Its also difficult to see a world where we wont h

148、ave stable,government-backed digital currencies.As these two trends converge;payments will be faster,cheaper,and more transparent.Secondly,barriers to entry to build technology have never been lower.This is thanks to pre-packaged,white-labelable,or embeddable,regulated solutions provided by fintech

149、companies,not just for payments and account information but right across finance.For example Low-Code or No-Code platforms and the recent developments of open-sourced natural language models(such as ChatGPT)are quickly making technology accessible.CustomerVertically integrated to ecosystem-based sup

150、ply chainsBanking InstitutionOpen Banking accelerates the creation of customer-centric networksIOTDevicesUtilitiesPayment ProvidersService PartnersTelecomsBankingInstitutionAggrega-torsGovernmentCustomerSource:29There is no longer this big mystery of how to get an app to market,and certainly no need

151、 for 100 developers and a$10 million budget.You can create a financial app with User Interfaces by dragging and dropping boxes and integrating your backend to a va-riety of infrastructure APIs.This previously would have taken months or even years to develop as a proprietary solution.Now the biggest

152、considerations in developing apps for consumers is to know your niche and branding.Will traditional finance companies be the losers from all this?Probably not.Financial services are better than any other indus-try at reinventing itself.Remember that American Express started out in 1850 as a freight

153、forwarder.Some of the big payment companies have already realised that their core business needs to evolve and are investing in open banking provider,such as Visas acquisition of Tink.Even banks,for whom open bank-ing has been painful and costly,have opportunities to shift into new business areas or

154、 distribution models.If there are losers,it may be those who persist in see-ing their brand as the only thing that is important to users,rather than getting comfortable evolving their business models where they may provide services in the back end and on the front end.An endless stream of opportunit

155、iesThe ability to share account information and make easy payments is clearly beneficial,but the most exciting aspect of open banking is the data itself.Imagine you are a lend-er.You already have an open banking solution providing the necessary data for your existing affordability screens.However,th

156、ere is so much potential to enrich that data using artificial intelligence to improve your models and forecasting.This is the next step,and its an endless stream of opportunities.The most exciting aspect of open banking is the data itself.30PostFinance is a bit different from most banks and as a res

157、ult can give some unique insights into the future of Wealth Man-agement,particularly as technology allows wealth services to be expanded to a broader population of consumers.We were founded more than a century ago as a subsidiary of the Swiss postal service and our primary remit is to facilitate pay

158、ments.Today,we have a third of the Swiss adult population as customers(2.5 million).Though,our charter doesnt allow us to lend directly.As a result,to meet the broader needs of clients within the confines of our chartered,we were one of the first banks to embed third party financial products,startin

159、g with embedded mortgages and moving to embedded insur-ance(life,car,travel,legal).This same requirement for innovation led us to build asset and wealth management products,able to serve the mass affluent segment.However,unlike many of the offerings in emerging markets catering to the rapid growth i

160、n young,digitally native middle classes,our investment services were also influenced by a different need.Education is a key component of broadening access to wealth management solutions Philipp Merkt Chief Investment Officer/Head of Asset Management Solutions,PostFinance 31Meeting the need for democ

161、ratized wealth in Switzerland The reason for our customers need was the recent period of zero and later even neg-ative interest rates imposed by the SNB,which were passed on to customers in 2019.Ordinary savers needed a way to invest to avoid the effects of negative interest,erod-ing the value of th

162、eir savings,and to do this we needed to offer them easy investment services they may not have been familiar with.For PostFinance low interest rates were also a problem.Impacting PostFinance more negatively than its competitors since we are not allowed to lend money or give mortgages to our clients d

163、irectly.We already had a mutual funds product and a self-service share brokerage one,but with falling interest rates,we started work on putting in place a wealth management service which went live in 2020 with independent,self-service,advisory,and discre-tionary e-asset management with a very low en

164、trance barrier.Our goal is to democratize wealth management,to bring it to a broader demographic and we estimate that a third of our wealth management customers are either investing or getting access to professionally managed investments for the first time.And unlike in many emerging markets our cus

165、tomers were not necessarily young,digital natives.Our biggest hurdle was financial literacy A study by the University of Luzern found that the biggest reason people dont invest,cited by two thirds of respondents,is lack of knowledge.There is more to financial management than saving and real estate,b

166、ut people are nervous to tread where they have no prior experience.Main reasons why people do not investFeel they do not have the general knowledge needed in investment products Are afraid theyll make mistakes when investing Dont feel they have enough wealth to invest 01020304050608070%66%63%70Sourc

167、e:PostFinance Investment Report,202232To address this,we invested significant energy into providing a suite of online resourc-es for education:an investment academy,with video tutorials,webinars,newsletters,articles,and a glossary.But most importantly,even for the CHF 5k minimum thresh-old investmen

168、t,every client has access to an advisor;this is hybrid wealth manage-ment for(almost)everyone.The product itself is also built to attract a broader cus-tomer base.As noted,the minimum investable amount is set at CHF 5k,and the fees are just 75bps per annum.The portfolios are professionally managed b

169、ased on the clients risk appetite,and there is also some ability to personalize e.g.,based on preferences like extra expo-sure to Swiss or sustainable equities.What we have achieved through combined focus on education with automation has been a cost-effective wealth management solution able to serve

170、 anyone in a broad segment and still be able to offer a personal,tailored service.As a result,we observe a lot of new money coming in.A large amount of people who use the service are first-time investors because the service is simple,easy to use and to understand,inexpensive and differentiated.It wa

171、s even voted best asset management service 2023 in Switzerland in the 2 categories“performance”and“shar-pe ratio”(both for the past 36-month period)by firstfive.The pendulum has swung away from an imagined future of high automation to a hybrid of human and digital in concert,as a template for the fu

172、ture of wealth manage-ment.But to expand this to the broadest base possible,education is key.The pendulum has swung away from an imagined future of high automation to a hybrid of human and digital in concert.3310k tokens I wouldnt want my salary in Bitcoin but Id happily have it in sta-blecoin.Often

173、,people put all digital assets in the same bucket but there are many types of digital assets,which play funda-mentally different roles in the future of money.In the main,they could make the financial system fairer and more accessible.Use cases that work to help people Lets take stablecoin as an exam

174、ple.Many of the worlds poorest people work abroad and send money home to their families.The financial services industry currently takes a huge cut of those in-ternational transfers,sometimes up to 25%.If those people were paid in stablecoin,like USDT(pegged to the US dollar),transfers would cost fra

175、ctions of a percent and the amount saved could be lifechanging.Transfers would also be faster seconds rather than days-and thats better for everyone.Tokenization to drive accessabilityThe future could also be more accessible in terms of invest-ment opportunities,via tokenisation.Tokenisation could a

176、llow us to buy fractions,making some core assets more acces-sible.For example,most people cant afford to own a large commercial building.However,property can be represented by digital tokens,and then divided into fractions.You could buy a square metre,or a room.Similarly,some stocks and bonds,in-clu

177、ding some government bonds,which are sold in denomina-tions too large for retail investors would now be accessible.Finance could be more inclusive,thanks to digital assets Tokenisation could allow us to buy fractions,making some core assets more accessible.Julian Sawyer Managing Director,Zodia34The

178、future of fractionalisation is even more intriguingOne interesting thing about fractionalisation is what happens next.Weve seen from other industries that,when things get broken down,they tend to re-consolidate but in a more user-friendly way.Think about the tourism industry,you used to go to a trav

179、el agent to book a packaged holiday.Then,when the internet arrived,we started doing everything ourselves flights,accommodation,insurance,hire car.Now,we go to one website and click,click,click,everything is booked.Perhaps well see investments broken down and put back together in ways that are better

180、 too.Such as,you could have a property fund with fractions of different buildings selected by an expert.Youd get the benefits of diver-sification but,because of the efficiency of digital assets,you could avoid things like lock-up periods or gating that make some property funds unappealing to retail

181、investors.The challenge aheadYou might think that challenges like FTX would have put the brakes on this industry,but the opposite is true.The big financial institutions havent changed their minds about digital assets and the direction of travel,but the need for security and regulation has dramatical

182、ly accelerated.We created Zodia because we saw the need for proper custody and segregation of digital assets,but demand for an operating model like ours has materialised sooner than we expected.When it comes to regulation,the challenge is that its always catching up with innovation.Thats the right w

183、ay around but it means theres a lag.Going back to the property example,imagine there are 100 rooms.Whats to stop the seller selling 110 digital tokens?Who polices that?Since this is a global industry,there isnt a single regulator.So,regulation is more like a jigsaw than a single framework.What will

184、matter is that everyone tries to create the same jigsaw picture,even if they have different speeds or methods.If we dont have consistency,we get regulatory arbitrage and thats damaging for consumers.We need security,consistent regulation,and better governance to make digital assets a fully functioni

185、ng part of the financial system.However,these are developing rapidly.Every company offering financial services should have a digital asset strategy,so that they are well placed to help their customers take advantage of the benefits of digital assets and help shape a more inclusive financial industry

186、.Regulation is more like a jigsaw than a single framework.What will matter is that everyone tries to create the same jigsaw picture,even if they have different speeds or methods.35Embedded finance is a term that describes the integration of financial services into non-financial products and services

187、.Examples include Tesla offering insurance to all drivers buying one of its vehicles,purchase financing with Klarna,and Shopi-fy offering a free business bank account to each of its nearly2 million merchants.Research suggests that 47%of non-bank platforms are planning to offer embedded finance in th

188、e future to retain their customers.And this interest doesnt apply to just consumers,SMEs are also open to embedded financefrom non-bank players(left charts).These statistics alone suggests that banks cannot afford to overlook embedded finance.Its arrival means that banking is now context-based:the r

189、ight financial products and services are offered at the time theyre needed,be that a car dealer pro-viding auto financing or insurance or a real estate agent offer-ing mortgage finance.So,embedded finance hasnt changed any of the fundamentals of banking,but rather how consumers interact with financi

190、al products.Until now,four areas have dominated the embed-ded finance ecosystem:1.Embeddedpayments and digital wallets(e.g.,Starbucks app)2.Embedded lending(e.g.,Shopify Capital)3.Embedded banking(e.g.,Uber cash)4.Embedded insurance(e.g.,Airbnb Aircover insurance for hosts and guests)Butwhilecontinu

191、e to pile into these,one area remainsrelative-lyuntapped:thatofembeddedwealth.Embedded Wealth:An Overlooked Opportunity?Robert Ruttmann Chairman,Redesigning Financial Services(RFS)36%52%57%47%of SMEs would be willing to pay the same or more for embedded finance compared to traditional bank45%41%30%4

192、4%of SMEs would prefer digital platforms to offer such services in partnership with a traditional bank30%44%52%41%of SMEs would be interested in using banking services from a non-financial service providerMicro(1-9 employees)Small(10-49 employees)Medium(50-249 employees)Source:Embedded finance for S

193、MEs:The ultimate collaboration of banks and digital platforms,Accenture,2021 36Hiding in plain sightOf all the opportunities that exist under the embedded finance umbrella,embedded wealth may be the greatest opportunity of them all.A recent embedded wealth manage-ment report goes as far as to call i

194、t the$100 billion opportunity hiding in plain sight.This is no exaggeration.It is arrived at simply by applying conservative management fees of 0.3%to the worlds$33 trillion of unmanaged investable assets.The untapped market potential is enormous.Consider the nine channels,through which billions of

195、consumers interact daily,that have the potential to unlock the$100 billion op-portunity that additiv refers to.Retail and challenger banksEmployee financial well-being platformsAsset managersHealth insurersPensions providers and life insurersConsumer platformsSovereign wealth fundsUtilities companie

196、sNon-Governmental Organizations(NGOs)Unlocking the opportunity will not be as easy as simply identifying it.Organizations that fall into one of the nine categories will need to offer customers a compelling combination of digital safety,convenience(i.e.,saves time,simplifies,and reduces anxiety),valu

197、e,and investment options.To cite the Chinese proverb,nothing is as powerful as an idea whose time has come.For wealth management,embedded wealth is an overlooked op-portunity whose time seems to have clearly arrived.37Wealth-as-a-Service(WaaS)is an untapped and untested mar-ket ripe with opportuniti

198、es for incumbents and new entrants.Over the last several years,the financial service industry has been focused on a core vision:To enhance the retail client ex-perience through the creation of personalized,comprehensive solutions delivered in a frictionless scalable environment.WaaS also allows prov

199、iders to meet customers where they live and provide them with access to a wide range of products and services at the point of need.Financial Services-as-a-Service(FSaaS)platforms make this vision possible.These platforms enable embedders(both FS and Non-FS)to seamlessly blend complementary products

200、and services from disparate busi-ness lines(banking,investments,and insurance)at the point of need within the clients digital journey.Building a Case for Wealth-as-a-ServiceJean Sullivan Head of Wealth Management at CelentWhat is Wealth-as-a-Service?Wealth-as-a-service(WaaS)is a business model where

201、 a finan-cial institution offers modularized products and services such as brokerage,trading,financial planning,and investment man-agement-as-a-service through modern,API-driven platforms.WaaS involves the unbundling of the traditional wealth stack.Through FSaaS platforms,products and services are u

202、nbundled into composable modular solu-tions,which can then be rebundled and offered via API,widgets,and iFrames by embedders such as Walmart,Revolut,and even other financial services firms.While Banking-as-a-Service(BaaS),one element within FSaaS,has been around for several years,WaaS is just beginn

203、ing to take off.38 What are the primary use cases?Wealth-as-a-Service(WaaS)is used as the infrastructure that enables embedded finance(wealth)for Non-FS firms and FS firms(banks and insurance companies)looking to offer or expand wealth capabilities.Through the use of API,cloud,and digital technologi

204、es,it is now possible to unbundle wealth management capabilities and repackage them via new distribution partners(referred to as embedders for the purposes of this report)to create a more seamless retail client experience.FSaaS platforms enable the convergence of previously siloed,channel-specific(b

205、anking,investment,and insurance)financial solutions.Wealth management firms no longer need to rely on a single platform from a single provider within a single industry.The business case has already been made in banking,and now wealth is entering the picture.This is evident in the growing list of Waa

206、S players and the emergence of powerful distribution partnerships.A$1 trillion AuM market and growing WaaS represents new revenue opportunities for FIs and other businesses that have digital platforms with existing customers or employees.It effectively allows anyone to become a wealth manager and of

207、fer brokerage,robo investing,and other services at good margins.And while the market opportunity is difficult to size,Celent believes that emerging trends and industry partnerships indicate that WaaS is an important and growing segment.We are already seeing WaaS actively being used.Non-FS players ar

208、e already offering embedded wealth to customers and FS players are leveraging WaaS to easily expand their offerings.Across the globe,incumbent FIs and technology enablers are looking to form partnerships that provide WaaS.Unlike BaaS,WaaS is a nascent segment but is expected to present a significant

209、 opportunity for well-positioned players with advanced tech.Its a$1 trillion AuM opportunity.Traditional Customer BaseDistribution Via intermediary ChannelsWealth Management Industry StackRetail CustomersDigital ChannelsFinancial PlanningCore Wealth Management StackClient Profilling/OnboardingAsset

210、AllocationModel SelectionPortfolio ConstructionTrading/RebalancingReportingCustody and ClearingRegulatory LicensingRegulatory LicensingTraditional Wealth ManagementWealth-as-a-ServiceSource:Celent 39In December 2022,I learned about ChatGPT by OpenAI.I found it to be a superior AI interaction tool,an

211、d,as the media began to hype its potential,I noticed that people were using ChatGPT to create income and transform industries.Wealth management is no exception.Morgan Stanley regard ChatGPT as a crucial milestone in their innovation journey,leverag-ing OpenAI technology to provide relevant content a

212、nd insights to their financial advisors.As an innovation strategist,I frequently converse with wealthy clients to gain insight into their perspectives and motivations which I then evaluate based on client desirability,viability for the company,and feasibility.Now with ChatGPT these interactions coul

213、d be enhanced In this thought piece,Id like to take a wealthy,tech-savvy individuals point of view,lets call her Anna.Ill place her two to three years into the future,where Anna has generated wealth by selling her suc-cessful tech company.While she has new ideas for a new venture and invests in star

214、tups,she also invests more traditionally with two wealth managers,seek-ing different advice perspectives to manage risks.However,she struggles to collate and comprehend the information.Prepare for more knowledgeable clients0Nov.22152.726661611.61.75Dec.22Jan.23Feb.23Mar.23Apr.23500 million1 billion1

215、.5 billionChat GPT uptake since launch.Marco Borer Global Wealth Management,F2B Digitalization and Innovation total monthly visits40AI to help clients understand Anna wonders if AI can help her understand the information she receives from her wealth managers,which could better prepare her for making

216、 decisions.She uploads the last two years worth of annual wealth statements to ChatGPTs Fin AI chatbot,and asks sim-ple questions such as,How does the performance of my advice CH portfolio at bank 1 compare to my advice CH portfolio at bank 2?or What have been the five best and worst performing inve

217、stments in all my portfolios?“How did the overall concentration of my Nzodia investment change over time?”She even contemplates uploading factsheets of her ETFs and funds to get a breakdown of each position to better understand the concentra-tion risks like from her Nzodia investment across all her

218、portfolios.Confidence in what to do next demands personal guidanceAlthough its not possible to do all of this today,these are questions that clients ask and that can only be answered by someone with the overview and tools to do so.AI can help clients understand their financial status better,but can

219、it provide answers that Anna can trust to execute her decisions?Perhaps,this can be achieved,if its trained with the right information.Nonetheless,its still some time away.This leads us to the final point:What does it mean for wealth managers if clients like Anna increasingly start to use AI?Digital

220、ization over the years made it easier for clients to find information,and AI will likely help them comprehend it all.But understanding doesnt mean Anna knows what to do with that infor-mation:What does it mean for the liquidity she needs today,the real estate she plans to buy,preparing for requireme

221、nt,her taxes?Wealth managers need to prepare for more knowledgeable clients.To do this,they must provide relevant and personalized hybrid solutions through digital channels for seamless and on-time interactions at the clients point of need.They must offer personal guidance to ensure Annas needs are

222、met.A hybrid approach is the start of intelligently servicing cli-ents in preparation for the future that ChatGPT holds for the wealth industry and beyond.Digitalization over the years made it easier for clients to find information,and AI will likely help them comprehend it all.41ContributorsThank y

223、ou to our global leaders for sharing their experties in the Future of Finance.Your diverse perspectives and experiences greatly enriched this whitepaper.Ian Charles Stewart is Executive in Residence at IMD and Chairman of the WheelsPlusWings Foundation.He is an avid investor in,and advisor to,organi

224、sa-tions in the FinTech,Media and Arts sectors.Stewart was Co-Founder of WiReD Magazine and Founder and CEO of Aztec Internet(responsible for BBC News Online and FT.com).Amlie Janssens de Bisthoven is Head of Business Intelligence at NS Partners.Amelie runs several key projects,committed to improvin

225、g business process efficiency.Amelie joined in 2008,after four years at Optimal Investment Services and two years at Trader Classified Media.Amlie holds a BBA from the Interna-tional University in Geneva(graduated summa cum laude,valedictorian,in 2002),and the executive program“Building On Talent”of

226、 IMD in 2014.Tim Delahunty joined Commonwealth Bank as the Chief of Finance in 2018,and was appointed Director of Tech,Ops and Finance in 2020.Tim has more than 17 years of experience in the financial service industry including banking,insurance,asset management and investment platforms.Sabine Dbeli

227、,CEO of Swiss Sustainable Finance(SSF),has 20+years of ex-perience in sustainable finance.She spearheaded SSFs establishment in 2014,aiming to position Switzerland as a leader in sustainable finance.Previously,at Vontobel and Zrcher Kantonalbank,she oversaw sustainability strategies and contributed

228、to launching sustainable investment products.Sabine holds a Mas-ters in Environmental Sciences.Deanno Basas is CEO ATRAM,a Philippine-based asset management compa-ny.He has 24 years of extensive experience in the local and regional financial markets,in both Treasury trading and Asset Management.He i

229、s a member of ATRAMs Investment Committee.Deanno was a past President and is a current Board Member of the Fund Managers Association of the Philippines.42Patrick Frith is a dynamic entrepreneur and business leader.Currently Patrick is COO at Tarabut Gateway,MENAs first and largest regulated Open Ban

230、king plat-form.Patrick is also the co-founder of Shoppe,an e-commerce platform in South-east Asia and previously co-founded Bud,an innovative open banking platform.Philipp Merkt has worked at PostFinance since 2015and is currently Chief Investment Officer and Head of Asset Management Solutions.Born

231、in Solothu-rn,he studied IT and economics atthe University of Fribourg and completed an MBA specializing in finance at the University of Bern and the Simon Business School at the University of Rochester in New York.Ali Alqaraawi is COO in Aljazira Capital.He has more than 16 years of experi-ence wor

232、king in Saudi Aramco and other private sectors in areas related to digi-tal technologies,operations,business development and project management.Ali holds a master degree in Business administration from Hong Kong University.Carsten Kroeber,studied Information Management in Cologne University.He kicks

233、tarted his career as a consultant at Accenture before joining the Deka-Group in 2008.With a decade of experience at DekaBank,he took on the role of Man-aging Director and Chief Technology Officer at bevestor-an online investment platform subsidiary of DekaBank in 2019,where he continues to excel.Chr

234、istine Schmid,is Head of Strategy and Executive Board Member at additiv.With over 25 years in financial services,she held executive roles at Credit Suisse including Global Head Equity and Credit Research.She is currently an active board member at Meridian,Servisa and Urban Connect.43Robert Ruttman i

235、s the founder of Redesigning Financial Services,a think tank dedicated to accelerating the structural transformation in the financial services industry.Robert is also co-founder and CEO of Urban Connect,a corporate mo-bility platform.Robert spent 11 years in financial services sector as a cross-asse

236、t strategist in the in Global Research at Credit Suisse and in the Investment Office at Julius Baer.Robert holds a PhD from the University of St.Gallen.For over 20 years,Jean Sullivan has been a consultant and researcher at provid-ing strategy and technology solutions to leading investment managers,

237、broker dealers,TAMPs and AdvisorTech vendors.She is currently the Head of Wealth Management at Celent.Prior to joining Celent,Jean was Head of Research at Ezra Group,a financial technology consulting firm.Julian Sawyer is CEO at Zodia Custody,an institutional cryptocurrency custody firm backed by St

238、andard Chartered,SBI and Northern Trust.Prior to joining Zo-dia,Julian was CEO of global cryptocurrency exchange Bitstamp and managing director of Europe for Gemini.Sawyer was also the co-founder of UK challenger Starling Bank and worked as its chief operating officer(COO)from 2015 to 2019.Marco Bor

239、erhas been in finance since the mid-90s in various rolesacross technology and global wealth management for a large bank.Today hes a subject matter expert for digitalization,innovation with a focus on developing the wealth management digital assets portfolio and driving horizon 3 explorations.additiv

240、 enables leading financial institutions and brands globally to develop new and transform existing business models,capitalizing on digital innovation and Finance-as-a-Service capabilities.additivs API-first cloud platform is one of the worlds most powerful solutions in wealth management,lending and i

241、nsurance.The technology,together with the global ecosystem of regulated financial service providers,opens new opportunities for banks,insurance companies,asset managers,IFAs but also consumer brands to offer their own and third-party financial solutions quickly and flexibly via existing or new customer channels.Headquartered in Switzerland,with regional offices in Singapore,UAE,and Germany and 300 employees,additiv serves around 400 financial companies(banks,insurers,asset managers,pension providers,IFAs etc)and brands