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Arena Insights: Financial Services Disruptive Technology A guide to investment, digitalisation and emerging technologies www.arena-international.com
FOREWORD
Arena Insights: Financial Digitalisation and next-generation values continue
Services Disruptive
to make waves across the financial services sector
Technology Handbook 2021
Portfolio Lead Ben Lloyd-Davies,
and are transforming the way banks operate. As
+44 207 936 6552 financial institutions prepare to thrive post-Covid,
BenLloyd-Davies@arena-international.com
Editor Amy Malkani
there is no sign that advancement in technology or
Arena Insights: Financial Services Disruptive
changing attitudes to investment are dropping off.
Technology Handbook is published by After the past year witnessed the industry’s rapid digital
Arena International Events Group, a trading
division of GlobalData.
transformation, digital-banking platforms, AI (artificial intelligence)-
John Carpenter House, John Carpenter driven investment tools, data analytics, and cloud-based services
Street, London, EC4Y 0AN, UK.
+44 207 936 6400 have in many cases become the norm. Meanwhile, customer-
events@arena-international.com centric thinking has put clients at the heart of the product offering
© 2021 Arena International Events Group. and fuelled demand for ESG (environmental, social and governance)
Registered in England No. 06212740 and ethical investments. With these trends here to stay, the
banking sector needs to keep up to make it in the digital age.
All rights reserved. No part of this publication
may be reproduced or transmitted in any Arena International presents the annual Financial Services
form or by any means, electronic or Disruptive Technology handbook as a valuable resource to navigate
mechanical, including photocopying,
recording or any information storage or this unstoppable terrain. This guide offers a voice to the key
retrieval system without the express prior thought leaders at the forefront of innovation and seeks to enable
written consent of the publisher. References
are available upon request. financial services professionals to take advantage of the new
Images: Shutterstock
The contents of this handbook are opportunities and emerging technologies. We hope you find
subject to reproduction, storage and inspiration and enjoy learning from the best in the industry.
retrieval systems.
Amy Malkani, editor, Arena Insights: Financial Services
Disruptive Technology Handbook 2021
UPCOMING FINANCIAL SERVICES EVENTS
SEPTEMBER OCTOBER
29TH – AI in Insurance 19TH – Motor Finance Conference and Awards
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NOVEMBER https://arena-international.com/customerexperience/
2 -3 – Retail Banker International:
nd rd
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10TH – Private Banking and Wealth Management:
London Conference and Awards 9TH – Private Banking and Wealth Management:
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ORGANISED BY
Virtual event Physical event
CONTENTS
Contents
6. The transition to open banking brings 31. Why machine learning and AI are good
innovation to the payments system for offering expert financial advice
Infynit co-founder Ritesh Jain explores the Wealth Wizards’ Tony Vail talks up the
benefits this will bring to financial inclusion automation of personalised guidance
10. The growth of digital technology is 34. Covid-19 highlighted environmental
prompting an acceleration in regulation and social issues that need attention
Melvin Quimis, senior RegTech specialist Patrick Thomas, of Canaccord Genuity
at the Bank of England, charts the changes Wealth Management, outlines why there
are reasons to be cheerful going forward
12. How customer journeys in insurance are
becoming digitalised by emerging tech 37. Insider threat is a risk to your
Tapoly’s Janthana Kaenprakhamroy covers organisation, so take precautions
the rise of insurtechs in the market Jules Pagna Disso, from BNP Paribas,
looks at the different types of threat and
17. Why wealth managers should follow in how to reinforce cyber security
the footsteps of other businesses
Noémie Ellezam and Stéphane Gomis, 40. Software: how to balance digital agility
from Societe Generale, reveal all with security and resilience
Starling Bank’s Jason Maude tests the link
20. Customer expectations are evolving, between speed and responsibility
shaped by a more personalised service
Aberdeen Standard Investments’ Jenny 41. Insight on customer satisfaction and
Davidson looks at the digital propositions opportunities during digital migration
Stephen Walker, from GlobalData, on
22. What is the impact of fintech and private chatbots, finding purpose and budgets
debt investing in financial services?
Antonio Curia of Wimmer Financial 44. Africa as an emerging market
describes why the outlook is positive FCMB Bank (UK)’s Stella Okuzu looks at
what the expansion of fintech means for
29. There’s great value in developing the art increasing wealth in Africa
of empathy in ethical investing
Zoe Robson, from Architas, on building 45. Suppliers’ Directory
wealth with sustainability in mind
4 | Financial Services Disruptive Technology
OPEN BANKING
The future is open
Ritesh Jain, co-founder of Infynit and former COO at HSBC,
discusses open banking, open finance, and the impact and
benefits this will have for financial inclusion
T
he transition to open banking is a the challenge for incumbent banks lies
transition from the traditional, vertically in reinventing themselves by transitioning
integrated model of exclusive providers to new business models by becoming a
to one that offers choice. The force behind platform, distributor or producer. New
open banking is a massive shift in customer entrants bring innovation into the banking
behaviour, digitisation, market concentration and payments ecosystem to enhance
and growing fintechs, and competitive customer value propositions, pushing
landscape. The pandemic has further beyond financial value into social and
accelerated this evolution by forcing entire ethical finance and financial inclusion.
segments of commerce and financial services Disruptors enrich revenue-generating
to move online overnight. business models, marketplaces and platforms,
Open banking is a paradigm shift with two building partnerships based on data sharing
central pillars: data and a relatively old technology and open APIs, fuelling collaboration, and
that has become mainstream – application bringing economies of scale and benefits to
programming interfaces (APIs). overall ecosystem stakeholders. And this
However, the whole game of innovation drive, diversity and openness in today’s
evolves and revolves around the data. Fintechs shifting landscape of open banking should
and challengers use data in creative ways to be judged with an unbiased open-minded
build innovative products and services, whereas approach towards fintech and tech players.
6 | Financial Services Disruptive Technology
OPEN BANKING
Payments Underserved communities in emerging markets
Open banking has provided significant hope for pay a poverty premium for essential services like
financial inclusion, and it starts with payments. phone, gas, broadband and electricity.
Payments serve as a gateway to other financial Open banking products could provide better
services like savings, credit and insurance. tariffs and deals, analysing spending patterns, and
Transaction accounts are essential to retail negotiating rates with service providers like Trim
payment services. Fintechs present opportunities in the US. This would encourage healthy financial
and challenges when enhancing the access and behaviours; for example, personal finance
usage of transaction accounts and payment management apps can support consumers by
products, and making them accessible through providing insights based on transaction data.
lower-market entry barriers. However, this poses
a level of operational, cyber, data protection, Access to credit
digital exclusion and market concentration risk. Open banking products can enable accessible
If these risks are not managed well, this could credit to those using alternative financial data.
impact the benefits of financial inclusion. Hence, An example is Mojo Mortgages, which assesses
it requires effective regulation and a framework affordability by combining transaction data,
for supervision. Customer identity is the most while other services such as Canopy use rent
significant barrier to financial inclusion, and over payments to improve credit scores. With
1.1 billion people lack official identification. alternate data and education for customers,
overdrafts and pricey credit products could be
Financial inclusion replaced by low-interest or interest-free loans
Financial inclusion is more than making financial based on credit score and spending habits.
services accessible to the unbanked. It’s the Government, financial services and fintechs
identity of people and the means to establish are working in partnership to address financial
new accounts. One cannot have financial inclusion. G20 GPFI (Global Partnership for
inclusion without access to digital identity. There Financial Inclusion) is focused on building these
are regional initiatives for national IDs to bring partnerships and support systems.
invisible people into the mainstream.
India created history with the introduction Open finance – the way forward
of a unique identification scheme in the form So far, we’ve discussed the changes open banking
of the Aadhaar Card. Aadhaar is a proof of could bring – but how would it actually work?
identity that stores biometric details such as There are challenges and issues which come
fingerprints and iris scans, as well as personal with open banking adoption. European
information, including name, gender, age, address regulation requires access to limited data,
and contact details. It works in a similar way to a namely payment accounts. This can offer a slice
social security number in the US. of data to third parties to gain insight and
The card has been a game changer for provide better services.
financial inclusion and governance. And a case Open banking is paving the way for future
study for top business schools globally. innovation, and it has proven that data can be
shared. Although it has complexities and
Open banking
Fintechs and financial institutions can alleviate
the pain points of low-income, underserved
people with volatile incomes. Open banking may “New entrants bring innovation
enable products that can help low-income into the banking and payments
customers save, and create financial support for
uninterrupted income and improve resilience to
ecosystem to enhance customer
financial shocks. Meerkat in South Africa is an value propositions, pushing
example: the saving and debt management beyond financial value into
solution is helping people to build saving habits,
and assisting in their debt management by
social and ethical finance and
negotiating with creditors. financial inclusion”
Financial Services Disruptive Technology | 7
OPEN BANKING OPEN BANKING
regulatory challenges, the technology is a
stepping stone. However, for overall financial
planning, a broader set of data is required,
including mortgages, insurance and investments,
to provide better services to customers.
This leads open banking to extend to open
finance and, thus, a set of services for the
customer’s overall financial well-being.
The real value of the data is derived from
various datasets. Markets and customers are
already experiencing new products and services
for financial management through open banking.
Open banking is regulatory-led in the EU, UK (KYC). With open finance, information could be
and Australia. However, there is no formal shared among service providers for efficient
regulation in areas like the US or Canada, while KYC and onboarding.
Hong Kong and Singapore have worked through Financial management: The overall financial
an open banking framework. Open finance needs management planning of a consumer can be
further advancement, and the path is still unclear optimised by integrating their savings,
due to various regulatory and geopolitical investments, wealth, pension and retirement
situations and policies; regulators and fund. Benefit-based products like higher interest
policymakers are still working through the details. rates, predictive insights based on consumer
Below are some key areas that policymakers behaviour and market performance can
and regulators would need to consider: also be automated.
Credit management and facilitation: It will be
1. Customer data and ownership rights are easier for lenders to offer better, more
essential to open finance. There are different competitive products. In particular, lenders will
standards and regulations, for example GDPR gain 360-degree insight into a customer’s
(General Data Protection Regulation) in the EU, finances with their consent. Lenders will have
Consumer Data Right in Australia and Data complete visibility of credit agreements and
Access Agreement in the US. arrangements, enabling them to provide dynamic
2. Interoperable, data-sharing standards and solutions to meet customer requirements.
regulations are vital; for example, open banking SME finance: SME finance is a significant
is regulated in the UK/EU and consumer data challenge due to disparate data. Financial
rights are regulated in Australia. Similarly, services will have a clear insight into invoices
regulations must be interoperable within and versus expenses and other data, enabling better
across different regions. credit line and finance options for SMEs.
3. The existing financial services framework may There are various benefits and challenges to
need to be adapted for the adoption of open implementing open finance and it takes a
finance. Open finance concerns areas including customer-centric approach. Regulators and
investments, mortgages and pensions and financial institutions need to work together to
regulatory changes and technical standards must define the open finance implementation
be established in the relevant areas. roadmap through a public-private partnership.
4. Open finance requires a clear risk and liability Open banking is paving the way for open
framework to safeguard customer interest. The finance. Consumers are experiencing the benefits
standards set up by open banking could be of open banking in payments and account
further enhanced and adopted for open finance. aggregation. And they could further benefit from
investments, mortgages, insurance, and pensions
Open finance has a broad impact on various if they are interconnected, API-driven, and
aspects of the financial engagement of a supported by platforms and systems. With
customer. Here, we discuss a few use cases. open finance, consumers will benefit from
Digital identity and onboarding: Open finance competitive services and will be able to manage
will significantly impact Know Your Customer their finances from a central place.
8 | Financial Services Disruptive Technology
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REGULATION TECHNOLOGY
Acceleration in
regulatory technology
Melvin Quimis, senior RegTech specialist at the Bank of England,
looks at the move towards digital transformation
T
he year 2020 was an unprecedented one
to say the least. The coronavirus
“The Bank of England has found
(Covid-19) outbreak has been one of the that interest among banks in
most significant pandemics in recent history, adopting machine learning
threatening global financial stability and posing
complex regulatory challenges. and data science has continued
The world around us is changing; many of during the Covid-19 crisis”
you reading this article, like plenty of other
businesses, including regulators, banks and
government services, may have been pressed into pandemic on their use of ML and DS. We found
speeding up the digitisation of your company. the following:
Remote working has perhaps permanently • The use of ML and DS by banks has
changed the way organisations operate, and this remained broadly stable since the start of the
in turn has inevitably opened up many challenges pandemic, with the number of applications
such as cyber risk. Indeed, according to a staying the same or increasing.
McKinsey Global Survey of executives, the • Half of the banks surveyed expected an
response to Covid-19 has accelerated the increase in the importance of ML and DS for
adoption of digital technologies by several years future operations as a result of Covid-19.
across various industries. However, only a third of banks said there was an
Given the growing influence of technology, increase in the number of planned or existing
there is a lot of potential for regulation ML or DS projects.
technology (RegTech), particularly in automation. RegTech is expected to grow rapidly.
For instance, the use of robotic process According to Juniper Research, global RegTech
automation (RPA) and natural language processing spending could rise from an estimated $25bn
(NLP) will see artificial intelligence (AI) ‘learning’ US in 2019 to exceed a massive $127bn by
better equipped to tackle fraud detection. At the 2024. In an industry where central banks play a
Bank of England, we have recently introduced a key role, we can expect tech-driven solutions
cognitive search engine with AI capabilities. that expedite recovery, resilience and innovation
There are, of course, voices that are cautious to fare better than some other industries in the
about the implementation of AI, particularly for face of digital transformation.
processes with a critical output. These voices In April 2021, the City of London Corporation
point to the pressing ethical issues that challenge published a report entitled ‘A Critical Year for
it, such as security and AI bias. These concerns RegTech’. The report found that the annual cost of
should not inhibit innovation, but should be compliance for Britain’s top five banks could be
addressed with meticulous attention to detail. cut by at least 0.05%, or a combined £523m
The Bank of England has found that interest with the greater adoption of this technology.
among banks in adopting machine learning (ML) The financial services industry could continue
and data science (DS) has continued during the to benefit from RegTech, while the wider
Covid-19 crisis. In August 2020, we conducted a RegTech industry could play an important role in
survey of banks to understand the impact of the the digital economy in the UK.
10 | Financial Services Disruptive TechnologyOPAL
Goal Based Planning & Monitoring
enables financial institutions and advisers to translate their clients’ personal goals into an optimal
investment plan and monitor these goals over time. The tool offers solutions for all stages in a goal-based
advisory process in wealth management but also retirement planning for example.
From a client intake and risk-profiling to (online) client reporting and proactive monitoring, OPAL can be
easily integrated with business processes, contributing to a structured and efficient process that is compliant
with (inter)national regulation.
Provide insight into Analyze and advice 24/7 Monitoring
risk and return
OPAL provides tooling that helps The projections in OPAL Continuous monitoring of the
clients identify, concretize and incorporate inflation risk and risk, return and financial goals
prioritize goals. High-quality currency risk. Furthermore, for individual clients as well as
scenario projections continuously client-specific information that the entire client base allows for
show the effects of investment affects the financial situation proactive and more efficient client
decisions, changes in a client’s and objectives of the client such management.
financial situation and market as (international) taxes and cost
developments on the feasibility of of services are fully taken into Permanent monitoring
these goals. account. simultaneously increases trust
and satisfaction of the client
Clear visual aids help the client This results in tailor-made and, as a consequence, business
and advisor to better understand projections, sound financial retention.
their options and improve advice and, consequently, better
decision-making. investment decisions.
The OPAL solution adds value by tackling
the biggest challenges that every advisor
and wealth management firm is facing:
Fee compression - allows advisors to scale their business
and support more clients at lower cost.
Regulation - monitoring of clients provides scale and adds
value to both client and advisor.
Digitization - clients can be monitored automatically,
using multiple data sources to create opportunity triggers,
based on portfolio metrics and goal feasibility.
For more information on OPAL or a live demonstration,
contact us at contact@ortecfinance.com or visit www.ortecfinance.com/opalINSURANCE
Digital transformation
and the customer journey
Janthana Kaenprakhamroy, CEO and founder of comprehensive
insurtech Tapoly, discusses how emerging technologies can
digitalise customer journeys in insurance
T
he challenges for the insurance industry survival. When the effects of the pandemic were
and its customers over the past year have starting to emerge, customers had important
been substantial. The continuing hard questions about policies and claims that needed
market, with resulting capacity shortages, is urgent answers. Contact with insurers and
making it more difficult for insurers and intermediaries was essential, but this was not
intermediaries to serve their customers and always possible for companies that were not
maintain good profit margins. Customers are set up for staff to work from home.
also facing their own challenges from Insurtechs are becoming robust and
lockdowns and reduced operating capabilities, established players in the insurance market. It is
so perhaps have diminished budgets or the clear that those who do not embrace emerging
need for greater flexibility. technologies, such as artificial intelligence (AI),
Despite these challenges, one thing the past machine learning (ML), automation and big data,
year has proven is the necessity of digital and use them in partnership with their human
transformation in insurance across the value chain. expertise, will be left behind in favour of more
Not just for modernisation, but for business agile and innovative organisations.
12 | Financial Services Disruptive TechnologyINSURANCE
Prospective customers
When potential customers want to find out “Emerging technologies provide
information about a product or service, the insurers and their distribution
natural instinct is to search the internet for
options. If the information isn’t readily available,
partners with ways to enhance
prospects will quickly move on to the next their customer experience,
option. There is only a very short window of while moving forward from
opportunity available to really capture the
attention of a prospective customer online, so the pandemic and out of
using the latest technologies to ensure your the hard market”
website is easy to navigate and clearly displays
all the required policy information will help to
push customers over the line. of data will supplement human expertise.
However, if they have specific questions or Insurtechs such as Tapoly are developing
do not fit neatly into a profession or policy, innovative application programming interfaces
they are probably going to require further (APIs) that can be incorporated into existing
details. You want prospective customers to be platforms, with specific global data stored in cloud
able to access this information at the most servers to enhance the underwriting and risk-
convenient time to them, including outside of profiling process. Alternatively, entire platforms
office hours, so phone numbers and live chat can be white-labelled to provide a hassle-free
facilities could become redundant if you do option for insurers looking for tailored digital
not have 24-hour capabilities. Insurance-specific systems. Using emerging technologies to enable
chatbots can provide an innovative solution automation and to remove some of the time and
to ensure you do not miss out on customer cost challenges associated with customer
traffic. Fuelling them with insurance-related acquisition and underwriting dramatically
keywords and policy details means prospective improves the customer journey.
customers can input their requirements
and AI technology can provide insurance Data sharing between insurers
advice tailored to their requirements. This and intermediaries
automation both provides cost savings for the Improving the use of data and data sharing
organisation from reduced manual processing, abilities across the insurance industry also
and improves customer service. improves the customer journey. The pandemic
Customer acquisition and underwriting
Once the customer has made the decision to
purchase, it is essential to make the process as
simple and automated as possible. Traditionally,
customers would provide their data and policy
requirements and insurers would produce a
quote after manually processing the information.
When trying to serve micro SMEs or freelancers
in particular, this process quickly reduces
potential profits. However, if automation is
incorporated into the pricing and underwriting
process, pricing can be done in real time, which
allows insurers to serve a greater number of
customers at a quicker and more efficient level. It
also gives customers a quicker indication of what
they could expect to pay, and they are able to
initiate cover sooner. This will not always be
possible with products with less data available,
however the increased automation and sharing
Financial Services Disruptive Technology | 13INSURANCE
caused the majority of businesses to pivot quickly quality of data being compromised when it is
to homeworking, thereby requiring access to passed through more siloed institutions, and can
internal databases remotely. Those who already speed up the whole claims process as the
had cloud storage systems in place were at a huge information required is easily accessible through
advantage as they could continue servicing cloud storage. The systems also provide full
customer demands without a hitch. audit trails and role-based access levels.
When insurers and their distribution partners
use emerging technologies to communicate Digital transformation
more efficiently, customers are provided with a The insurance industry is beginning to harness
quicker and more efficient service. When data is the power of digital transformation, although
shared, risk profiling becomes more accurate and progress remains gradual. Emerging
it becomes easier to benchmark performance. technologies provide insurers and their
This ultimately benefits the consumer. distribution partners with ways to enhance their
customer experience, while moving forward
Claims from the pandemic and out of the hard market.
If insurers and their partners utilise emerging AI, ML, APIs, automation and big data can all be
technologies to connect the dots, share data and employed during the prospective customer’s
speed up the customer journey, it can also journey, through acquisition and underwriting
enhance their claims procedures. If third-party to claims. Ultimately, customers are looking for
administrators are used, they could also be a smooth, quick, accurate and cost-effective
provided with access to the same insurtech user experience and emerging technologies can
platform to aid document management and data help to provide this and enable long-term
analytics. This mitigates risks of the quantity or customer retention and satisfaction.
14 | Financial Services Disruptive TechnologyIN PARTNERSHIP
Are your client lifecycle
management processes
playing in sync?
There are few sweeter sounds than an orchestra playing
harmoniously and keeping perfect time
W
hen each section works hard timely and coordinated way (usually when they
independently, and then comes have inadequate direction), the result can become
together as a team, it creates a messy – very quickly.
magical musical experience for the audience. These are the top three things you need to
And whether they are playing classical music or assess to transform your client’s experience:
putting an alternative twist on jazz, retro or pop, • Address poor-performing CLM functions. To
as long as the strings, brass, woodwind and ensure that each phase of CLM delivers a
percussion sections do their bit individually remarkable client experience, evaluate each
– and come together as a unified whole – the function throughout the client journey and
results will be remarkable. through your clients’ eyes. You will undoubtedly
In the rare event when an orchestra has no find that some elements are working
conductor, whose job it is to ensure that the exceptionally well, while others are falling behind.
whole is greater than the sum of the parts, timing No one would suggest that you replace the entire
can be an issue. The experience can become orchestra when the woodwind section is the only
uncoordinated and shambolic, from start to finish, one performing poorly. Tackle each substandard
despite each section believing that they are doing function one by one, while being careful to
the right thing at the right time. preserve all that is good.
• Connect the dots to eliminate CLM silos. CLM
Client lifecycle management and technology has to be viewed as a unified whole to deliver
in wealth management consistent and effective client service across all
Getting client lifecycle management (CLM) right phases of the lifecycle. Clients become frustrated
can be challenging, but it doesn’t have to be. In our when an amazing onboarding experience is
analogy above, substitute these instrumental followed by unresponsive and substandard
words for stakeholders in the CLM process, and ongoing management. While each section of an
all will become clear: orchestra may play beautifully, in time and in key
as an individual team, the overall effect is
Audience = Client Woodwind = Onboarding
compromised if they are unable to synchronise
Strings = Marketing Percussion = Client success
Brass = Sales Conductor = Wealth Dynamix
with other sections.
• Ensure oversight and control. An orchestra
Even when each part of the CLM process works can’t perform a memorable symphony without a
well as an individual function or department, they conductor. With no individual or team in place to
must come together as a unified whole to be govern the overall connectivity, the likelihood of
successful. From the sales and marketing process achieving a cohesive outcome is at risk. The same
through to initial client engagement, onboarding, is certainly true for CLM.
ongoing client management and regulatory
Watch our webinar to discover how to orchestrate
compliance, every function needs to perform CLM, step by step, to create a productive, cost-effective
effectively and work together to optimise the and revenue-generating process that enriches client
client experience. If any part of the process is experience. Visit www.wealth-dynamix.com to
substandard, or departments fail to connect in a find out more.
Financial Services Disruptive Technology | 15IT’S HARD TO
DRIVE SUCCESS
WITHOUT THE
RIGHT TOOLS Are your relationship managers
in the right driving seat?
FOR THE JOB.
CLMi is a new, cost-effective,
scalable and intuitive Client
Lifecycle Management (CLM)
platform from Wealth Dynamix
that puts the productivity of
relationship managers and
satisfaction of your clients at the
forefront of your business.
Take control of the full
client journey: from initial
engagement and onboarding
through to ongoing relationship
management.
Designed specifically for wealth
managers, CLMi is the SaaS
platform of choice for out-of-
the-box ease-of-use and rapid,
cloud-based deployment.
Find out more:
wealth-dynamix.com/CLMiWEALTH MANAGEMENT
How to turn a traditional
wealth manager into a
digital business
Noémie Ellezam, chief digital strategy officer, Group Innovation
Division, Societe Generale and Stéphane Gomis, head of business
development, Innovation and RSE, Societe Generale Private
Banking, consider how digitalisation is encouraging customer
engagement and fostering growth
Financial Services Disruptive Technology | 17WEALTH MANAGEMENT
W
hen setting out to digitally transform Secondly, it’s important to accept that the
a wealth management business, a benefits of digitalisation go beyond cost and
common misconception is: it’s operational efficiency. Technology is quickly
different for us. In fact, the best and quickest changing the products and services that wealthier
way to make wealth management businesses customers expect. They want to access services
future-proof in a digital world is to learn from online or via their mobiles. Even customers in
the transformation of other businesses, whether their 60s might conceivably be interested in
in different sectors or different parts of the novelties like tokenised art, hyper-personalised
world. At Societe Generale, retail banking has content, goal-based robo-advisers or almost
proved an invaluable source of inspiration for autonomous investment super-apps. There’s
wealth management business transformation. a completely new world emerging that has
Some 60% of retail bank customers are digital; to be mastered.
94% of transfers and payments are digital; and in Thirdly, digital products and services are not
some countries up to half of all sales are digital. just short-term revenue sources. They should be
For that reason, we think that the retail banks thought of as magnetic tools for building a new
have now reached ‘scale’ digitally. kind of customer connection. Collecting data
But learning from retail does not mean about your customers – with appropriate consent
ignoring wealth management’s distinctive – allows you to provide the products your
success factors – expertise, accuracy, customer will value most.
personalisation and client relationship. It’s just
that technology reshapes them, making them Our wealth management journey
more data-based, scalable and inclusive. In When starting our digital journey at Societe
future, private bankers will have to differentiate Generale’s wealth management division, we
themselves by not only their technical knowledge reimagined the DNA of our customer
and personal skills, but also how they leverage relationships, expertise and trust. Cash may be
technology. king in a bank but, in a digital world, data is
Just as in the retail world, wealthy customers queen. For that reason, we started by re-
are migrating to digital products and services. engineering the data and digital architecture.
Over the past year, Covid-19 has accelerated The first step was to get our data in order.
this shift. What’s more, customers still prefer That meant either putting it on a single system
traditional wealth managers over newcomers, or in a data lake. Then, we needed to hire data
whose revenue models are not so clear and which scientists. The next step was to build a single
have suffered from recent negative news. That digital platform for offering wealth management
means digitalisation remains a huge opportunity services. Doing so allowed services from across
for growth for incumbents to offer innovative the bank to be offered through a simple,
options, while remaining the most trustworthy consistent and intuitive portal.
providers of financial services. After laying these foundations, the interesting
part began: fostering innovation and disruption
Lessons from digitalising our retail bank at the heart of the business. There are lots of
The scaling up of Societe Generale’s retail bank opportunities. Fundamentally, as data gives you
happened in three different phases. This journey increased knowledge of your clients, it allows
to maturity has lessons for digital innovation in
wealth management. So, what does that mean?
Firstly, it means understanding that digital “We are evolving from bankers
transformation is not just a tech transformation,
but also a business transformation that
to quasi-life coaches. We aim to
revolutionises the customer experience. be a place where wealthy
Applied to wealth managers, this involves customers go for a vast range of
making a deep cultural shift, accompanied by
a clear vision, as well as the broad alignment services, with our insights into
of objectives and rigorous execution. their needs enhanced by data”
18 | Financial Services Disruptive TechnologyWEALTH MANAGEMENT
you to offer a better service. For an industry intelligence to offer high-quality products.
giving financial advice, it is a game changer. Asset aggregation, digital patrimonial diagnostic
You can tailor your services more closely and or investment robo-advisory are only a few
even expand the product range. A whole host of examples that are already available to customers
new opportunities is emerging. There are digital in our European markets. Even so, these will be
currencies or crypto assets, as well as the simple products and services that third parties
chance to work with fintechs, start-ups or other can distribute, thereby generating additional
partners. Additionally, there are opportunities in revenues. Our start-up, Kwiper, which provides a
responsible investment products. full-digital wealth management planning tool
Interestingly, as our bankers speak with the to accountants, is an initial example of these
entrepreneurs who are their clients, especially new distribution models.
those from the tech sector, they are pushing for In terms of delivering a magnetic experience,
more product and service innovation. Their we are evolving from bankers to quasi-life
clients have a fierce appetite for innovative coaches. We aim to be a place where wealthy
products and services. customers go for a vast range of services, with
our insights into their needs enhanced by data. A
What next? large range of partners, internal or external,
So, where will this end? We believe that being a could provide these services, such as Reezocar,
wealth management leader in the future will the online car-buying platform Societe Generale
involve embracing innovation from many areas. recently acquired, which specialises in the sale of
Broadly speaking, our digital strategy is twofold: second-hand cars, including luxury models.
to produce the best wealth management The digital wealth management leader of
products and services, as well as delivering a tomorrow will reinvent both its products and
customer experience that goes beyond banking. distribution models. Tech is not just about
We are aiming to produce the best products efficiency – far more significant is its potential
and services for any customer, whatever they for improving growth. Digitalisation will not kill
are looking for. To do so, we are harnessing revenues, it will encourage customer
data, artificial intelligence and distributed engagement and create long-term value.
Financial Services Disruptive Technology | 19CUSTOMER EXPERIENCE
Personalisation – now is the time
to embrace digital technology
Jenny Davidson, global head of Integrated Wealth Solutions,
Client Solutions Group, Aberdeen Standard Investments,
discusses how customer experience in other sectors
influences the digital proposition in financial services
T
echnology is changing our relationship We order our grocery shopping online, listen
with money – customers are setting a to music via streaming services like Spotify,
different bar for experience and this has, watch TV shows and movies online via Netflix
to a large extent, been driven by ‘liquid and, largely due to Covid-19, we have witnessed
expectations’. This is when customer the acceleration of customer uptake of online
experiences seep over from one industry to an digital banking services. This has effectively
entirely different industry. So in terms of resulted in banks transforming their business
financial services, our customer expectations interaction with customers to a predominantly or
are continually shaped by their interaction full digital proposition within months.
with customer-centric brands such as This digital movement has enabled consumers
Amazon, Apple and LinkedIn. to grasp the opportunity when it comes to
The traditional approach for businesses was choosing when, where and how they engage
to focus on their competitors or companies that with organisations. Customers are now more
offered the same products and services, but in control than ever and are demanding a more
that scope is now far too narrow. personalised service. As a result, businesses need
20 | Financial Services Disruptive TechnologyCUSTOMER EXPERIENCE
to adapt to secure and retain the depth of a client “Providing a highly personalised
relationship as this influences persistency, share
of wallet and profitability. cost-effective client service at
scale can only be achieved via
Creating value
technology and data”
On a B2B basis, there is increasing interest
with businesses to help them create value
(digital alpha) through a combination of high-
touch digitally integrated client experience tools Technology and data
with investment products that have been Providing a highly personalised cost-effective
designed to align to a client’s needs, preferences client service at scale can only be achieved via
and beliefs. This integrated solution allows technology and data. The term ‘hyper-
businesses to strongly differentiate their personalisation’ refers to the use of data to
proposition and offering from that of their provide more personalisation and to target
competitors, while creating the right outcomes products, services and content – creating that
for their clients. overall solution. Just think of the volume of
Digital applications used in this way can client data that can be captured during each life
provide increased efficiency through the stage, providing a rich source of intelligence that
provision of a full client self-service model with could be used to interpret client needs,
‘bionic’ advice, where individual client and preferences and goals. This could in turn provide
financial adviser input is married with the individualised risk profiles aligned to investment
outcomes from analytical algorithms and artificial solutions and customised advice. The
intelligence to create a tailored service. possibilities are endless!
Direct-to-consumer apps, which are designed To win in our market of the future, companies
to enable consumers to save from as little as £1, are going to need to offer stand-out experiences
are also popping up and can be downloaded to attract and retain customers. Digital
from Google Play or Apple’s App Store. Think of technology will be absolutely key to this and is
it as a savings and investment strategy tailored already transforming the industry – but it’s
to your phone, providing limited guidance using evolving quickly, as are investors.
open banking technology, which gives a live The upside can be substantial for businesses
view of consumers’ spending patterns across and consumers, breaking down barriers to
their different accounts. It will help users to save investment with the provision of relevant
for a particular goal or identify excess income educational content and engaging experiences,
that could be invested. This provides businesses empowering more consumers to take charge of
with a new way to interact. their financial future.
Important information information is not guaranteed as to its warranty whatsoever is given and no
The above document is strictly for accuracy. Some of the information in this liability whatsoever is accepted for any
information purposes only and should not document may contain projections or loss arising whether directly or indirectly
be considered as an offer, investment other forward-looking statements as a result of the reader, any person or
recommendation or solicitation to deal in regarding future events or future financial group of persons acting on any
any of the investments or funds performance of countries, markets, or information, opinion or estimate
mentioned herein and does not constitute companies. These statements are only contained in this document. ASI reserves
investment research. Aberdeen Standard predictions and actual events or results the right to make changes and
Investments (ASI) does not warrant the may differ materially. corrections to any information in this
accuracy, adequacy or completeness of Any opinion or estimate contained in document at any time, without notice.
the information and materials contained in this document is made on a general basis Issued by Aberdeen Asset Managers
this document, and expressly disclaims and is not to be relied on by the reader Limited, registered in Scotland
liability for errors or omissions in such as advice. Neither ASI nor any of its (SC108419) at 10 Queen’s Terrace,
information and materials. employees, associated group companies Aberdeen, AB10 1XL, and Standard Life
Any research or analysis used in the or agents have given any consideration to Investments Limited registered in
preparation of this document has been nor have they or any of them made any Scotland (SC123321) at 1 George
procured by ASI for its own use and may investigation of the investment Street, Edinburgh EH2 2LL. Both
have been acted on for its own purpose. objectives, financial situation or particular companies are authorised and regulated
The results thus obtained are made need of the reader, any specific person or by the Financial Conduct Authority in the
available only coincidentally and the group of persons. Accordingly, no UK. GB-220421-147564-1
Financial Services Disruptive Technology | 21FINANCIAL SERVICES
Digital trends in
financial services:
2021 and ESG
Antonio Curia, executive director at Wimmer Financial,
discusses the impact of fintech and private debt investing
T
he last year was a real game changer, and The fintech industry
the changes we made in 2020 are not Businesses continue to seek ways to maximise
likely to stop when Covid-19 wanes. their ability to innovate and maintain flexibility,
Around the world, people and businesses which is driving increased activity around cloud
recognise the importance of agility, flexibility consultancies. Some firms – like those that
and responsiveness. Companies across the provide cloud-computing services, or devices
financial services spectrum understand what is that support remote working – will become
at stake if they do not embrace digital stronger. Others, like bricks-and-mortar retailers,
innovation. As we look back on 2020, we see will suffer. Many will fail altogether. But once
that the world has had an opportunity to again there is a silver lining: these changes open
test-drive the future, and it looks bright. up new arenas for innovation.
Two mega trends – digitisation and greening Already, companies big and small are devising
the world – were already in force before the fresh tools to improve the experience of remote
pandemic struck. However, we did not fully working, collaboration and learning to support
appreciate their worth in our lives or portfolios. new kinds of contactless and appointment-
We have now experienced their inherent value, based retailing, as well as to provide new types
their ‘unstoppability’. of online social experiences, from virtual
22 | Financial Services Disruptive TechnologyFINANCIAL SERVICES
“Fund managers are looking for
cost-effective technology
solutions that can help them to
alleviate the administrative
burden associated with
increasing deal volume and
structural complexity”
insights, and are increasingly becoming key
drivers of organisational performance. As part
of a growing trend, they are deploying new
technologies and approaches, including advanced
data capture and structuring capabilities, analytics
to identify connections among random data, and
next-generation cloud-based data stores to
support complex modelling. Together, these tools
and techniques can help organisations turn
growing volumes of data into a future-ready
foundation for a new era in which machines
will not only augment human decision-making
but eventually make real-time and at-scale
decisions that humans cannot.
Data and strategy
Despite the economic challenges that pandemic-
mitigation measures have created for many
conferences to virtual tourism and more. There companies, those that have seen the most value
is no going back to the past that existed before in AI are doubling down on the technology.
the pandemic. Instead, Covid-19 has propelled That’s why strategists are turning to strategic
the world into a very different future and has technology platforms equipped with advanced
been a trend accelerator, especially with analytics, automation and AI. Digital tech can
regard to digitalisation. help address these emerging priorities.
For investors, the focus on innovation may A recent analysis looked at 20 targets related
create opportunity around accelerated to the UN Sustainable Development Goals and
technological progress and a real digital found that the expected global deployment of
transformation. Organisations that take existing digital technologies will, on average,
preventative measures and deploy machine help accelerate progress towards these targets
learning (ML) analytics, digital and robust by 22% and mitigate downward trends by 23%.
back-office workflow solutions will ensure that Companies are already applying digital
portfolio performance and value are insulated technologies to goals other than financial
from the adverse impacts of any downturn. On returns. Some companies, for instance, are
the other hand, as artificial intelligence (AI) and applying digital technologies to support
ML mature, a generous dose of engineering and workforce diversity. Additionally, using digital
operational discipline can help organisations technologies to improve environmental
overcome these obstacles and efficiently scale sustainability and workforce diversity can
AI to enable business transformation. provide direct financial benefits.
Sophisticated ML models help companies Investment strategies focused on extending
efficiently discover patterns, reveal anomalies, credit through private debt, bilateral loans and
make predictions and decisions, and generate direct lending have grown significantly in recent
Financial Services Disruptive Technology | 23FINANCIAL SERVICES
years. This trend is continuing as investors information and facilitate more expedient
search for higher yields than the traditional fixed reporting and communication for informed
income products have produced, private equity investment decisions.
investors spin up direct lending teams, allocators In fact, digitising and managing data in an
increase their allotment to private debt given the organised fashion, to create more efficient
attractive risk-return profile and the global portfolio monitoring and to simplify reporting
market volatility brought on by Covid-19 processes, is a significant benefit to our clients.
endures. Many practitioners in the industry aim Data transparency from the borrower to the
to improve ROI by streamlining workflows and lender and from the lender to their limited
enhance performance by organising and partners is crucial in today’s environment.
digitising data. In turn, credit managers and Investors are asking more questions, more
direct lenders benefit from more modern frequently, and about a broader range of topics
reporting processes and workflows that support including valuations, diversity, environmental,
active and informed decisions around pipeline social and governance (ESG) and technology.
and portfolio management, compliance and risk. These diligence queries lack standardisation
and include comprehensive questions in varying
Technology is becoming more important formats. By simplifying investor reporting, teams
Growth and competition within the private debt have less disruption to their day-to-day routines
segment is a huge driver for technology. In and investors benefit through the speed and
2020, we’ve seen that fund managers are efficacy our solution brings. Innovation will
looking for cost-effective technology solutions accelerate. So will the adoption of technology.
that can help them to alleviate the administrative Over the last decade, the European non-
burden associated with increasing deal volume performing loans (NPLs) and non-performing
and structural complexity. Essentially, they want exposure (NPE) industry has matured, with loan
to spend more of their time focused on alpha sales and securitisations becoming the modus
generation and beta management. In order to operandi for banks. Meanwhile, a growing
do that, they need technology that their teams number of investors entered the NPL market. But
can leverage to effectively organise their data just as the market began to gain momentum and
and processes, safely and securely share see steady growth, it was hit by Covid-19.
24 | Financial Services Disruptive TechnologyFINANCIAL SERVICES
The resulting fall in activity has been rapid and right time with the right offer or advice. They will
severe. This serious decline means that it’s know how frequently a client wishes to be
essential for investors, banks and other players informed, what length and format to use for
in the NPL market to develop a strategy that specific interactions, and what emotional tone or
allows them to identify and manage vulnerable style is most suitable. Using them, they can
loans with appropriate risk mitigation. Such a deliver curated investment themes, peer-to-peer
strategy starts with the creation of a proactive, networks, interactive simulations, and exclusive
tailored debt management mechanism. A solid offerings that foster fun and engagement.
strategy for managing and storing data can help
optimise data scientists’ skills and time, ESG and impact investing
especially after the impact of the disruption/ Wealth management providers should not let
acceleration of trends made by the Covid crisis. near-term challenges, such as lack of scoring
By simplifying the process of classifying data and models or data, prevent them from developing
controlling access, automated data management a thoughtful ESG portfolio. They need to offer
can help address data governance challenges. investments that generate measurable social or
Increasing the simplicity of automatically setting environmental benefits alongside strong
up investments for loan administration and financial returns, backed by solid compliance
portfolio monitoring will be essential. measures. Firms should encourage advisers to
Customised advisory solutions are key for discuss values and sustainable development
ultra-high-net-worth individuals. The digital goals in detail with their clients, and should give
interface remains an interesting tool for a more them the right training and incentives to do so.
agile analysis but it’s not the most important Those conversations should also look outward.
part of the relationship between client and Committing to ESG requires an internal
adviser. No matter how capable machines reckoning and the ability to excel in ESG
become, human interaction and trusted, standards, and wealth management providers
personalised relationships will remain key, need to reflect those standards in their internal
especially for clients in the upper wealth bands, agenda and practise what they preach.
who tend to have more complex needs. Human Reducing carbon emissions or resource
judgment, creativity, and empathy are essential consumption can help organisations reduce or
to forging meaningful, trust-based relationships; mitigate costs. Organisations are using these tools
and robots and AI cannot easily replicate to continually identify internal and external
these qualities. The head of digital strategy at a strategic forces, inform strategic decisions, and
global wealth manager said: “Trust will remain monitor outcomes. Technology can also help
essential. Platforms and digital solutions alone leaders gain insight into seemingly unrelated
will not be sufficient to establish trust.” occurrences that can drive smarter strategic
choices on a continual basis. As a result,
A wealth of opportunities companies are transforming strategy
Over the next two decades, the most advanced development from an infrequent, time-consuming
wealth management providers will be able to process to one that’s continuous and dynamic,
think five steps ahead and see what types of helping strategists think more expansively and
solutions and support clients may need even creatively about future possibilities.
before those requirements present themselves. Strategists should evaluate technologies
Next-generation ML analytics will help that help empower their imagination by
providers to make incisive connections that identifying driving forces, informing strategic
reveal potential client opportunities. decisions, and monitoring outcomes. With ML
Visualisation tools built into the models will poised to overhaul enterprise operations and
enable advisers to walk their clients through decision-making, a growing number of AI
different financial and investment choices, pioneers are realising that legacy data models
giving them a more visceral feel for how and infrastructure — all designed to support
different scenarios might play out. decision-making by humans, not machines —
Personalisation will be key to success. could be a roadblock to the use of ML for future
Winners will be able to reach each client at the success in this landscape.
Financial Services Disruptive Technology | 25You can also read
