Author: Techrules

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The future is now: artificial intelligence and wealth management

By Techrules

 

Think about this situation. Imagine that you are client of any wealth manager and the staff sends you a report about the best chances for your investments, with recommendations and comments to obtain the best performance. Then, you talk to a friend, who is also client of the same wealth manager and you both comment about the report. You discover that both reports are personalised and are not the traditional recommendations’ standardised reports that these entities publish regularly. Each one have personalised information and you both discover that the entity has used your full data to design the best report to meet your needs. Then, you explain your friend several changes in your investments. Both have the same risk profile, but your portfolios (and the historic operations) have nothing to do to another.

 

The example could be larger, but it is enough to introduce the changes that we will live soon in the wealth management branch. The expression behind these changes is artificial intelligence. Shortened as AI, it is not a Steven Spielberg film. It is far from fiction, because it is reality. The learning capability of machines increased exponentially in the last years and the soar will keep on. There is a combination of big data analysis, natural language and machine learning. Big data analysis provides the capability of learning better not only about the customer, but also about any trend that goes around him. Natural language allows machines to interpret and generate spoken and written language. Machine learning uses algorithms that can learn and make predictions on data.

 

This will be the mix that we will see growing in the next years. The transformation will be deep in the whole financial sector. Currently, a 26% of assets and wealth manager firms already use AI to inform the next big decisions, according to PricewaterhouseCoopers. Money is flowing increasingly there, because all agree that this will be the next step for fintech business.

 

For instance, natural language processes will help comply better with regulations, as machines will learn immediately the changes and adaptations will be easier in platforms. This will also has a very relevant collateral effect managing risks more efficiently. The client will obtain a high-improved user experience with new interfaces. The advisor tasks will focus in asset gathering and portfolio monitoring. They will also become more responsive to client needs and increase the added value of their services.

 

Robo-advisor in the first deep step in this change. There will be further changes with a greater automation. Robo-advisors and human advisors will experience several transformations in their tasks and roles against clients. They, the clients, will be winners and the only losers will be entities (not only human, also fintech) that will not adapt to the new wave.

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Digital transformation of financial advice: improvement through technology

By Techrules

 

Digital transformation of financial advice.

 

Today, financial technology (Fintech) is one of the fastest growing sectors in the industry and has revolutionised the world of finance. In the past, investing was “left” to the experts, this was due in part to the lack of visibility around charges, technical jargon and restricted access to financial information. The millennial generation, those born in the last 20 years have adopted technology as their main means of communicating with the world and do not trust the traditional financial institutions. They are constantly searching for financial information using their mobile phone or tablet. These changes are the reasons that the Department of Research at the Instituto de Estudios Bursátiles (IEB) [Institute of Financial Studies] has produced a paper entitled the “Study of the Digital Bank in Spain”.

 

The digital transformation of financial advice will have a significant impact on the delivery of banking and financial services products and services, and redefine the customer experience. Two points of view should be considered. The first aspect concerns habits. The spread of the Internet and mobile phones that support connections to the network have brought about a revolution in who is able to access information, what information can be accessed, and when.

 

Many barriers have come down since this does not involve special applications; instead, a single URL will take us to the area of current interest. Moreover, financial information has far more open-access sources, which has made it possible to expand and disseminate knowledge about finance, together with specific pathways that are much more readily accessible, and include propositions that are tailor-made to the investor’s requirements. In short, it’s no longer necessary to study 4 or 5 years in order to be an investor. What does this imply? That there are more potential clients thanks to the interest aroused in finance. In the current environment of low interest rates, and with a crisis that damaged the image of the traditional bank, clients are seeking advice from alternative sources rather then just their bank, wanting a level of personalisation and efficiency.

 

There is also more transparency within the industry with important financial information being made available, sophisticated financial tools readily accessible and the media always discussing issues that may affect people’s investments.

 

 

Today’s investor does not passively accept the investment strategy recommended by a financial advisor. Quite the opposite, they analyse the markets and form their own conclusions using the resources available, these resources include web applications and financial platforms. With all of this economic information accessible to the customer, the financial advisor’s job has become a lot harder, with them having to justify their recommendations, keep up to date with the markets and constantly having to improve their knowledge and service to justify their fees.

 

This is why the skill has become more open. The financial sector has to fight for clients who are increasingly inclined to be more self-directed, more independent. The availability of technological tools has fostered this engagement, while improving the sector’s efficiency and reducing its costs. Today more people are potential clients, because the investor is also interested in small portfolios. Smaller entry portfolios have meant that more people can invest using technology. Technology and the new habits it has engendered is not an obstacle, but rather an opportunity to expand and diversify the market through numerous options. Some clients are more autonomous than others, have more initiative than others. Technology enables the finance sector to adapt to people’s particular characteristics and habits, and to adjust better the price of the service provided.

 

According to Techrules’ managing director, Jaime Bolívar, “Fintech is constantly evolving, and we are closely monitoring the types of products and services that people want. Firms that fail to adopt this trend will struggle to be successful unless they can justify their existence by providing a highly specialised service. The future lies in combining technology with the advisor’s expertise to provide tailor-made services to a public that’s segmented not only by its investment potential but also by its knowledge and proactivity”. Although the integration of financial tools within the banks and family offices make the provision of financial advice easier, and more efficient, those seeking better returns will still require a more tailored approach.

 

There is little doubt that Fintech’s digital transformation creates new business opportunities rather then destroying them. Many are the soothsayers who predict the demise of financial advisors and call for a rebellion against Fintech platforms or robo-advisors, a phenomenon that recalls the battles of Luddite British workers who destroyed textile-making machines in order not to lose their livelihoods. Precisely. The introduction of such new machinery opened up the way to create many new jobs, spawning new business models. Here we have a similar situation. While some fintech companies may want to compete directly with the established financial institutions, it is our view that the majority of these companies are more looking to partner with or sell their services to these financial institutions. It’s not a fight between victors and vanquished: it’s cohabitation.

 

There are benefits for both parties working together, for the Fintech they gain access to customers, distribution, data, capital, experience, licences, a trusted brand and the ability to scale much more quickly. For the financial institution, this means getting access to new ideas, solutions, capability, knowledge and potential investment opportunities.

 

The introduction of these new tools will create many new products, services, distribution methods and business models. Our view of the future involves a hybrid advisory solution involving the delivery of personalised advice in a digital era and democratising advisory services, traditionally reserved for large financial institutions. Investing in digital innovation is critical to meet the increasingly demanding customer needs, these will include the needs of self-directed investors as well as those wanting to use robo-advisors, attracted by standard low-cost portfolios. There will be financial advisors specialising in Fintech tools, providing a distinctive service for smaller customers. There will also be larger financial institutions partnering with and sourcing capability from Fintech companies to enable them to enhance their customers’ experience, to streamline their operations and to allow their customers to fulfil their financial needs.

 

We must embrace the Fintech revolution and welcome the different models under development. Some will be better than others, and this depends on how well suited they are to meeting their customer’s individual requirements. Everyone will identify the model that works best for them and target a specific market segment with those adapting successfully doing very well.

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ENG Consulting Group SA signs an agreement with TechRules to market the TechRules financial solutions (Wealth Management) in France and Germany

By Techrules

 

TechRules, leader in financial solutions entered a partnership with ENG ConsultingGroup to market its financial solution tools within Germany and France.

 

TechRules is a leading company in Digital Wealth Management Technology to empower financial advisors, asset managers and private investors. The company has been founded in the year 2000 and is now present in more than 15 countries. The Head Office is based in Madrid and London.

 

ENG Consulting Group is an independent company founded in the Grand-Duchy of Luxembourg. They rely on their in-depth knowledge of the financial community to market dedicated innovative solutions to the European financial industry.

 

“TechRules is delighted to work with ENG Consulting Group. We believe in their strong network and expertise in financial markets to extend our market shares in Germany and France”, said Jaime BOLIVAR, Chief Executive Officer of TechRules.

 

“We are proud to build up a strong partnership with a well-known company in the financial sector like TechRules and help to extend its market share in Germany and France based on their Wealth Management solutions and our strong network” said Eric Engelborghs, CEO of ENG Consulting Group.

 

About TechRules

 

TechRules is a global technology company focusing on financial advisory solutions. We offer a complete range of Front and Middle Office solutions for Private Banking, Personal and Retail banking, Family Offices, Brokers and Fund Managers. Our solutions are multifunctional, multichannel, multilanguage and modular that allows our clients to cover the complete cycle of advice, improving relationship with their clients while complying with the local regulation and MiFID II. In addition, this translates into a significant cost savings and helps increasing business.

 

About ENG Consulting Group

 

Based in the Grand-Duchy of Luxembourg, ENG Consulting Group is an independent company offering a wide range of solutions, services and products to the European financial industry.ENG Consulting Group provides a strong and close support to the companies to improve their business performance and their operational efficiency through accurate and innovative tools.

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TechRules, one of the 100 selected firms at the FinTech Conference in London

By Techrules

 

TechRules has taken part in the FinTech Conference in London, a major specialised event where 100 firms of the sector have been selected to show their developments.

 

This event was closed to a selected group of leading FinTech companies. Since the very beginning, TechRules has shown its powerful technological developments based on scalable solutions. The presence at this conference is an award to the full job done until now. TechRules CEO, Jaime Bolivar has explained the visitors the business model focused in global platforms and specific solutions for banking and wealth management.

 

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Jaime Bolivar commented: “TechRules has worked for more than 17 years in the FinTech sector, before everybody talked about it. Innovation and cutting-edge technology have been our company brands and our customers have always acknowledged our deep knowledge in the branch. That’s why we were delighted with the invitation to the FinTech Conference 2017, as it has positioned us as a relevant firm in the sector”.

 
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AGEFI Luxembourg: Robo-Advisor article by Techrules

By Techrules

 

Robo-Advisors, Technological Business Models for Small and Medium Advisers

 

The financial services industry is cur- rently undergoing a significant transformation in the way that their advisory services are being provided and delivered to their individual investors.This is being driven by a number of factors including new regulations, changing demographics and technological progress.

 

These changes are occurring at a time when the need for financial advice has never been greater, as savers deal with the challenges of prolonged low and negative interest rates on high levels of cash, inadequate savings, longer life expectancies, and a greater expectation for them to take responsibility for their finances. In 2014, robo-advisors were seen as a threat to their human counterparts. However, only a year later in 2015, we have come to believe that they can work together. In fact, a hybrid route seems to be the best way forward with a robo-advi- sor complementing a human advisor in giving financial advice. This provides numerous benefits including faster Asset Under Management (AUM) growth, the identification of new opportunities in upcoming market segments including millennials with more opportunities to sell high-margin finan- cial advice.

 

We have now the landscape within which there are a number of different options for introducing robo- advice capabilities, including free standing robo- advice (direct channel), a product offering through a call centre based advisor channel, product “dis- tributed” through full-service advisors and a toolset embedded in the platform supporting a broad range of advised products.

 

Robo-advice has already had a significant impact on the wealth management industry with the use of Exchange Traded Funds (ETFs) within their port- folios, transparency and lower fees which have allo- wed smaller investors initially rejected by traditio- nal financial advisors to now invest their funds.

 

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While established financial organizations adjust their business models accordingly, small and midd- le financial advisers may find themselves at a signi- ficant disadvantage in the marketplace due to them not being able to compete at a reasonable price. With these small and middle financial advisers in mind, TechRules has developed and standardized technological solutions which can be implemented easily and with a cost that is “in-line” with the size of their business.

 

Although we offer many different platforms, two that have proved very popular are T-Advisor, an advanced wealth management tool for self-directed investors and our robo-advisor, an online discretio- nary wealth manager providing a personalized, globally diversified portfolio designed to generate long term wealth for its investors.

 

By using technology, we can manage and grow their wealth for less than the cost of traditional financial services. In summary, we believe that the hybrid route is the way “to go” as the advisor provides the reason for the customer to stay with the digital expe- rience and the technology then becoming the means to provide an omni-channel experience with the right amount of professional support.

 

For those who would like to obtain more informa- tion on the options available, Flexitime is organizing a conference lunch on “The next wave of digital investors and the role of robo-advisors!” on Thursday, 20 April 2017 at the Cercle Munster.

 

By Jaime BOLÍVAR, CEO at TechRules (Spain)

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TechRules in the ETF Product Development Summit in London

By Techrules

 

Aimed at potential new entrants to the ETF market, existing ETF issuers and the wider professional ETF community, this half-day summit will address key ETF and ETP product development themes.

 

The summit looked at product development regarding all the main asset classes, as well as next-generation concepts such as in-built currency hedges, smart beta, SRI/ESG and active ETFs. The summit will also addressed ETF industry trends, market infrastructure and microstructure issues, market maker and authorized participant initiatives, exchanges, trading platforms and MTFs, security structures and product fungibility, and legal, regulatory and compliance developments, with expert contributions and insight from industry-leading figures throughout.

 

For fund management companies not yet active in the ETF space, the summit provided a “one-stop shop” for them to learn how they can enter this fast-growing market and to meet, in one place, a selection of key vendors, service providers and market participants who can guide them through the ETF launch process and life-cycle (and over all the hurdles), from product conception and design, through to listing, cross-listing and beyond.

 

For existing ETF issuers, the summit addressed key industry trends, consider product areas that are ripe for development, and look at the various projects, initiatives and developments that are designed to increase ETF adoption and enhance efficiencies within the ETF ecosystem.