The Financial sector is one of the most regulated industries in the world which makes it hard for a small business to enter the space and follow all the complicated laws around licensing, capital requirements, security requirements, etc.
The barrier to entry in the space is pretty high which a two-edged sword as the giant companies can form cartels and monopolies resulting in high risks and low accountability.
However this is all changing with Technology, the FinTech industry has taken some leaps with new technological innovations. New companies are sprouting gaining huge traction, especially among the millennials.
How is it all changing?
Disruption in the Wealth Management industry is almost inevitable at this point. According to an article from Deloitte, the companies either have to adapt or die.
The article says:
“there are signals that customer preferences may experience a quantum shift, as opposed to the incremental changes that the industry has seen over the past decade.”
In recent years, we have witnessed an increase in wealth management companies catering to the young audience. As the young investors are fairly tech savvy it is easier to build applications for such an audience. This has increased the market depth making financial products accessible for a wide range of customers.
Many of the traditional firms are falling behind to tech startups who are taking leaps in creating online solutions and significantly lowering their fees.
Artificial Intelligence and Blockchain…Perfect Combo?
The rise of Artificial Intelligence and Blockchain technologies serve as a perfect catalyst for the disruption about to happen in the wealth management sector.
Artificial Intelligence enables a significant rise in automation and portfolio management. A few algorithms can do a lot more a lot better than what most humans have been doing manually. With AI, investing is not just an ordeal but is made enjoyable to users.
Even more recently, Blockchain technology has gained a lot of traction for a good reason. Blockchain allows fast settlement of trades which would take days in the traditional system to be settled in a matter of minutes. It also increases data security and operational efficiency which can be critical.
Companies like TrustVerse are utilizing both these technologies to help people manage their Crypto assets and their entire online identity.
The company uses AI to provide personalized investment plans based on the user profile. The user will also be alerted in real time on the market fluctuations to rebalance their portfolios. The dApp platform even suggests the rebalanced portfolio based on market movements which are optional for the user to choose.
Smart contracts are used to settle the user assets with the required party, this not only avoids any kind of unnecessary conflicts but also saves excessive legal costs.
With such companies rising, competition in Wealth management is going to be higher than ever. There is no doubt that the industry is set for disruption in the coming years.
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