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The Impact of WealthTech on Financial Services

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47 Views | 9 min | Published On: May 28, 2024 Last Updated: June 3, 2024

The world of financial services is undergoing a seismic shift where traditional methods are gradually giving way to innovative new technologies. This transition is driven not only by technological advancements and fintech app development company, but by a change in investor generations demanding modern solutions.

In essence, to cater today’s tech-savvy generation demand, Fintech has coined “Wealthtech” or “Wealth Management Technology” uniting wealth management techniques with technology.

A report by KPMG revealed that wealth management revised its services, product, and operating models with the help of a fintech app development company to address customer’s demands. In this regard, a CAGR of 42.6% (FY 2020 – 2027) represents a significant growth potential for the market. This statistics underscores the importance for investors, businesses owners as well as policy makers to access the potential opportunities and challenges associated with the market’s growth trajectory.

The technology appeal hasn’t gone unnoticed by investors, with 73% of UK investors believing that AI chatbots could offer reliable financial advice. No surprise that 42% of investors aged between 18 to 34 have already tapped the technology to brace their investment decision-making.

With these numbers in mind, it’s evident that wealth management apps will have not only revolutionized the way we manage our finances, but curates as an indispensable tool in achieving financial stability.

Let’s uncover everything about wealthTech app development, benefits it offers, use cases in the financial landscape and how fintech app development company develops it.

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What is WealthTech?

WealthTech, as the name suggests, is a subset of Fintech that uses advanced technologies and digital solutions to make traditional wealth management efficient and automated.

Primarily, wealthTech improves decision-making and simultaneously allows users to manage their finances efficiently in a manner that is different from how conventional financial institutions work. Because of technology advancements in software as a service (SaaS), Big Data, Machine Learning, Artificial Intelligence, etc, fintech solutions can now offer personalized advice regarding wealth management.

Exploring Wealth Management Value Chain with a Fintech Development Solutions

According to McKinsey, WealthTech domain can be categorized into three archetypes based on how they cater to clients.

  • Direct-to-Consumer WealthTechs (D2C) – This segment offers goal-based investment advice and management to public assets directly to retail investors throughout the wealth spectrum. Its core objective is to make tailored financial advice easily accessible to the market in an affordable way.
  • Solution Provider to Financial Institutions (B2FI) – The business-to-business wealthtech firms help financial institutions in reengineering everything from front-end client portal to back-end integration.
  • Solution Provider to Financial Advisors  (B2FA) – This is about empowering financial advisors with tech-enabled platforms to address clients requirements more efficiently. These solutions enhance advisor capabilities while providing clients an unparalleled digital experience for managing investments.

How WealthTech Benefits the Fintech Landscape?

Wealthtech has underpinned revolutionizing traditional practices, making them more efficient, automated, accessible and transparent. Here are noteworthy benefits for investors and end-users of wealth technology .

  • Democratizing Access

Among the key drivers behind the growth of WealthTech lay’s the democratization of wealth management services.

According to a Research and Market study, by 2025 the number of investors is expected to reach 12 million. Historically, these services were accessible to high-net-worth personnels because of high fees and minimum investment requirements. However, with wealthtech, everyone with an internet connection and a mobile phone can easily access investment opportunities.

In layman’s terms, these platforms use algorithms to build diversified portfolios based on an individual’s risk tolerance and financial goals, empowering them to take control of their financial activities.

  • Increased Accessibility

With mobile eWallet app development company, wealth technology expands access far beyond the traditional walls by lowering the barrier like high account minimums, confined geographic service areas and in-person interactions posed by brokers.

For example, robo-advisors like Wealthfront only need a few hundred dollars to open and manage accounts compared to conventional methods, leveling the field for retail investors.

  • Customization

Sophisticated algorithms bracing huge datasets enables wealthtech solutions to provide customized recommendations and portfolio allocations that are streamlined to each investor’s financial goals, liquidity needs and risk tolerance.

Contextual nudges and notifications improve user engagement by customizing the experience. Specifically, for FinTech in the wealth management landscape, the emerging technologies like AI, ML and Blockchain represent a significant opportunity for investors to leverage the power of data for making more informed decisions.

  • Affordable Mindset

Far beyond the shadow of doubt, fintech wealth management solutions automate a greater segment of operations, trading execution, portfolio management, and advisory services harnessing RPA and AI.

Adhering this approach minimizes the need for expensive human resources and architecture. Furthermore, web/mobile delivery models save on distribution costs as well. The ensuing savings are further passed to end users in making services more affordable.

  • Improved User Experience

Some prominent wealthtech apps portray slick and intuitive user interfaces that keep users hooked. Besides, flexible online account opening, unified financial data views, advisory chatbots, interactive dashboards, and instant transaction notifications propelling user experience light years ahead.

  • Heightened Security

End-to-end encryption, biometric login authentication, advanced cybersecurity, distributed ledger technology and centralized data monitoring contributes to make wealthtech more secure and resilient to data and potential financial threat.

Simply put, security is heightened compared to traditional methods.

Wealthtech app development solution
  • Enhanced Transparency

Wealthtech solutions integrated with personalized notifications, API architectures, engaging dashboards, and automated reporting allows unprecedented transparency to investors on investment performance, holdings, strategies, fees and future financial moves by their providers.

  • Scaled Operational Efficiency

Optimizing wealth management processes with automation and AI-powered enhancements exponentially improves operational efficiency. This mirrors reduced errors, quick transaction processing, minimal information requests, and quick scaling up of client bases without an equivalent costing surge.

  • Augmented Risk Management

Wealthtech app comes equipped with scenario analysis, portfolio stress testing, cash flow modeling, and calculation modules using predictive analytics and data science approaches to evaluate and mitigate risk. This is imperative, especially considering that wealth involves recommending investment products with complex structures.

  • Maximized Revenue Potential

Adhering to the Agile approach, API-based platforms WealthTech solutions offer real-time visibility into the client activity along with flexibility to add new partnership channels. This nurtures accelerated innovation accompanied with the potential to capture promising opportunities that other organizations may skip.

  • Abidance to Regulatory Compliance

Establishing compliance processes like transaction monitoring, KYC (Know Your Customer) verification, advisory workflow and risk rating into account opening offers significant efficient benefits in addressing regulatory compliance like AML (Anti-Money Laundering) and fiduciary standards.

Adherence to regulatory standards offers comprehensive audit trails to present compliance during regulatory exams.

Development Process of Wealth Management Apps – Fintech App Development Company Approach

The development of a wealth management app requires the perfect combination of cutting-edge technology and strategic planning. Let’s understand the fundamentals and considerations to build an app that stands out in the competitive landscape.

Step 1: Requirement Gathering and Ideation

First and foremost, the process starts with a discovery call with clients to understand their project-oriented requirements, target audience and business objective. Next, our team analyzes the gathered information to come up with a vision of project scope and iterations to be made.

This step ensures a seamless transition into conceptualizing the app’s core objective, crucial features, and target audience. Besides, it consists of thorough market and user research to help define the app’s USP (Unique Selling Proposition).

Here’s a quick rundown of all the imperatives it includes:

  • AI-driven personalized recommendations
  • Financial planning tools and calculators
  • Portfolio tracking across assets/accounts
  • Interactive reporting and data visualization
  • Protected account funding and money transfer
  • Automated rebalancing and investment management

Step 2: Designing UI/UX and Prototyping

We, at Apptunix understand the importance of an engaging and user-friendly UI/UX in attracting and retaining users in today’s competition. That’s why our designing team pays attention to every minute detail while crafting an engaging, simple, and eye-pleasing design.

The process starts with designers creating wireframes and interactive prototypes, visualizing the app’s outline, navigation, and user flows. Keeping user experience in mind, our designers create well-defined customer journey maps that present a clear picture of how users will engage with the service and achieve their primary goals – “wealth management”. Numerous iterations will be followed by testing with a real group of users to make the app bug-free.

A quick glimpse of all that comes in here:

  • Outlining user flows, prototypes and wireframes
  • Defining the visual design style guide
  • Developing clickable prototypes
  • Design iterations based on feedback

Step 3. Back-End Development

Our experienced back-end coders starts developing the wealthtech solution’s architecture that will support the app’s core functions and features. For example, investment analysis, portfolio tracking, financial planning, etc. Herein, our fintech app developers take care of everything from data management, financial integrations, to establishing complex algorithms for portfolio analysis and performance tracking.

Plus, we integrate required APIs and business logic along with heightened security measures to keep users financial data protected.

Step 4. Front-End Development

Our front-end developers are well-versed with fintech app development services, especially when it’s about crafting a responsive and engaging user interface driven by emerging technologies. This includes coding the app’s visual elements, optimizing for numerous devices, and ensuring a seamless user experience.

Step 5. Data Integration

WealthTech apps depend on real-time data from market domains, financial organizations as well as user accounts. Thus, as a reputed fintech app development company we prioritize integrating trusted data sources to offer precise and up-to-date insights for investment tracking and analysis.

Step 6: Quality Analysis and Testing

During the development, our QA analyst simultaneously carries rigorous testing to detect bugs, errors, or usability concerns. Our quality analyst plans iterations to validate the wealth management app’s performance, usability, acceptability, and functionality.

Also, quality assurance helps ensure app’s perform flawlessly, offering a smooth user experience and adherence to industry standards.

What makes us an ideal fintech app development company is our approach to document the testing results in QA analysis for fine-tuning the app at the earliest.

Step 7. Deployment and Constant Support

Our team walks the extra mile to deliver nothing less than excellence.

We deploy apps to the respective stores, manage the submission process, and simultaneously ensure a seamless roll-out. Once launched, we offer continuous support, maintenance and updates to keep the app safe and optimized, making advancements based on the feedback.

Wondering to make a difference with your wealthtech solution? Forget the old rules and discuss how to capitalize on the evolution of technology.

Use-Cases of WealthTech with Fintech App Developers

Wealthtech ecosystem has revolutionized the investment arena and disrupted ways of understanding modern ways of managing finances.

Features to be Considered in a Fintech App

As we dive deeper into wealth management app development, below, we shed light on innovative features that make the app a must-have for individuals looking to optimize their financial strategies.

  • Portfolio Tracking

Ensure wealthtech solutions offer users complete access to information on performance, asset allocation, historical data and real-time insights of their portfolio. Besides, harnessing this feature, users can easily manage their finances and make informed choices.

  • Financial Coaching

A handful of wealth management solutions include educational materials like webinars, blogs or videos to help users improve their financial literacy. This enables users to improve their financial knowledge and make more informed financial decisions.

  • Multi-factor Authentication

An integral part of the Fintech domain is security, especially when it’s about user authorization. To use wealthtech solutions in a secure manner, users sign in and share personal information about their bank details, spending habits and income. Thus, we follow best practices like 2FA, biometric authentication to prevent any potential threats.

  • Account Aggregation

Users leverage the integration functionality to have access for completing their financial picture at one place. Thus, wealth management apps should briefly overview bank accounts, credit/debits cards, investment portfolio and other financial considerations.

  • Expenses Management

This feature will help users keep track of their spending behavior better, consisting of expense categorization in the list. This is no rocket science – just, when a user makes a transaction through an account, these expenses are categorized in specific segments – housing, education, transportation, subscription, miscellaneous.

The expenses optimization feature is also a considerable choice in the fintech app development service. This will visually represent spending patterns, overspending alerts and financial optimization recommendations.

  • Reporting and Analytics

Easy data visualization, analytics and reporting features are crucial to facilitate user interaction with the app. Moreover, users can easily track their finances and save money by maintaining a precise record of their financial transactions.

Furthermore, a fintech app development company ensures app users handhold daily or annual reports to analyze income or expenses, evaluate forecasts, and more through well-synchronized data.

  • Robo-Advisory Services

For a successful wealthtech app, robo-advisory feature is inescapable. These algorithms understand user preferences, financial objectives and risk tolerance to provide personalized user investment deals and automatically execute trades.

  • Notifications

Innovative notification systems help users stay up-to-date, informed and make actions timely. Apps like these send real-time notifications, portfolio maintenance, insights regarding market trends, account activity and upcoming bill payments.

  • Financial Planning

Integrating this feature means offering users financial freedom.

This way users can define their financial goals for the day, month, quarter or year, including buying a home, saving for retirement, supporting education, etc. The goal-defining feature can also allow them to create personalized plans, track of progress, and get assistance on achieving those goals.

What Future Holds – Emerging Trends

Without a doubt, the wealth management landscape is evolving at the speed of innovation. Thus, keeping abreast of the bottleneck competition and leveraging first-mover advantage is crucial to stay ahead of the tangent.

Our experts at Apptunix have pocketed top five trends of 2024  for disruptors in wealth tech. Don’t miss the last one to dominate tomorrow’s financial sector.

  • Robo-advisory Services

According to deloitte, robotic advisory services are set to manage more than $ 16 trillion in assets by 2025.

Primarily, Robo-advisors are automated investment platforms leveraging algorithms to offer financial advice and portfolio management. Thus, it’s expected to show no sign of slowing, especially among Gen Z clearly underscoring the potential of an untapped market.

  • AI-ML Integration

Artificial Intelligence and Machine Learning technologies are transforming the wealth management industry. Precisely, AI-driven wealthtech solutions analyze a behemoth amount of data, identify market patterns, and offer tailored investment recommendations.

Also, AI assists advisors productivity with the help of bots and virtual assistants, providing real-time support and custom advice to clients.

  • Enhanced Security Protocols

Managing sensitive financial information requires regular security enhancements. It varies from allocating resources to strengthen security measures with biometric validation, advanced encryption techniques, 2FAs, etc.

  • Blockchain

Blockchain technology, known for its immutable nature not only assists in asset management but also creates new classes of assets. Furthermore, Blockchain is imperative to the wealth management industry because it can act as a catalyst to pace the exchange process of assets on decentralized networks.

  • Integration with IoT Devices

By providing seamless interaction with smart devices, the Internet of Things (IoT) has the capability to transform wealth management. IoT devices come in the bigger picture by automating processes and providing tailored information with real-time financial data.

For instance, smart wearable technology keeps track of user health status and can recommend the investment plans taking fitness in consideration.

Wealthtech app development solution

Conclusion

Finally, the wealth management market is burgeoning at an unprecedented pace, making it accessible to a wider range of consumers. Notably, it’s evolving towards offering more client-centric and tailored services, as well adding the competitive edge to the offerings made by the advisors.

If you are in the same room as industry innovators, Apptunix is the right place to start with. Our dedicated and tech-savvy team is ready to offer fintech development solutions to create something extraordinary.

 

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