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Report: Finovate 2019

March 1, 2019

From February 12th to 15th representatives from Europe’s leading financial institutions, FinTech firms, and regulatory bodies convened in London for Finovate Europe. The final two days of the event featured expert speakers who discussed current and anticipated trends in areas such as A.I., open banking, customer experience, digital transformation, and RegTech.

Here are Cutter Wealth's five key take-aways from this year’s Finovate Europe.


Prepare For a Disruptive New Era of Customer Engagement

The balance of power has shifted from financial institutions to customers due to:

  • Emergence of innovative technology
  • Changing customer expectations
  • Regulatory initiatives that favor greater competition

Over the past few years, we’ve observed that relationships between clients and wealth managers have become less sticky. The intensification of these three factors means we’ve now arrived at a tipping point, and it is our opinion that wealth managers can no longer take customer loyalty for granted.

Relentlessly Focus on the Client Experience

Cutter believes that the only way forward is to focus on creating a curated customer experience. This can be achieved through:

  • Authentic Personalization

Social media is a repository of small data. This information can provide predictive insight into the financial behavior of customers. Wealth management firms that harvest this data and combine it with other personal information will be better at addressing clients’ unique financial challenges.

  • Frequent but Short Digital Interactions

Digital interactions must be convenient, fast and easy to undertake. For this reason, we’d advise financial institutions to launch multi-purpose apps instead of relying on several platforms for different banking activities. Additionally, we recommend that digital interactions be omni-channel, so that a task begun on a desktop can be completed on a mobile or tablet device.

  • Building Clients’ Trust

Customers need to trust wealth management firms’ new products and services . We anticipate that this will be especially important as firms start to embrace new technology solutions such as blockchain and biometric authentication, which may cause unease among some client segments. It is our opinion that strategic communication about the functionality and security features embedded in these services coupled with a collaborative approach to wealth management will go a long way to assuaging client concerns.



There’s No Such Thing as an Easy Data Request

Whether it’s GDPR or open banking, customers are being afforded increasing control over their data. Although the flood of data requests expected after GDPR didn’t materialize, many financial institutions have found it difficult meeting the few requests they did receive.

In order to remain compliant, Cutter proposes that wealth managers invest in a master inventory of their client data. This should include details such as the categories of data stored, storage time, purpose for collecting and storing the data, and a log outlining with whom the data has been shared. Ideally, this will provide a holistic view of each single client that will not only facilitate compliance, but allow for greater personalization, too.

A.I Alone is Not the Solution to Regulatory Compliance, But Augmented A.I. Could Be

A.I. technology will enable wealth management firms to intuitively navigate large data sets, changing the way computers and people interact. This is not to say that the humans will be subordinated by increasingly powerful technology. If anything, we expect human insight will be necessary to maximize the full power of A.I., especially in the realm of new regtech initiatives.



Don’t Underestimate the Open Banking Trend

It’s been just over a year since the Financial Conduct Authority launched open banking in the UK. While uptake has been slow, we would emphasize that it took time for consumers to embrace previous innovations such as ATMs and contactless payments.

By end of 2020 around 20 markets will have either gone live with open banking or written open banking regulation. Although some jurisdictions are leading with regulation, Cutter anticipates that open banking in countries such as the US to be primarily a market driven process. For financial institutions at the forefront of this trend in the US, there’s the possibility of first-mover advantages and the ability to shape the form that open banking takes in that jurisdiction.


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