A Swiss firm which won an awards for its approach to wealthtech talks to this news service about how rising complexity in the industry is an opportunity for its type of business.
Christine Schmid, strategy head of additiv, tells Stephen Harris, publisher of this news service, why additiv is part of a positive future for wealth management. The firm won the award this year for its approach to wealthtech innovation. (See more on the WealthBriefing European Awards 2021 programme.)
What is additiv doing to ensure that its European clients
thrive in this ever-changing environment?
Even before the COVID-19 crisis, wealth services were expected to be quick and easy, with availability from multiple access points. The pandemic created an even greater reliance on digital resources, but receiving personal and tailored advice was no less important. In fact, initially the crisis triggered a requirement for more wealth advice, particularly for high net-worth individuals. Reaching clients directly was a problem for many wealth advisors; however, at additiv we were already supporting many of our clients with our Hybrid Wealth Manager product responding to this challenge.
A hybrid approach allows financial institutions to offer services
that best suit their client’s individual needs, letting them
choose how they want to be serviced. Depending on those needs,
the advice and guidance available can be human or self-service.
Supported by intelligent analytics, clients can be serviced
personally. Rather than impeding the client relationship, it
actually encourages collaboration through in-person and remote
advisor/client conversations on a multitude of channels. It
allows relationship managers to remain productive and focused on
clients when it matters most, improving scalability for banks.
Using this model our customers who serve clients are thriving, but the benefit isn’t just limited to this segment. For example, during the initial COVID-19 confinement period, our customer PostFinance launched their digital investment platform. As one of the largest retail banks in Switzerland, they wanted to expand their range to include wealth products to clients wishing to diversify away from low-yielding savings products. The platform offers a seamless and engaging advisory and discretionary end-to-end experience. It has seen a massive take-up, adding around 6,000 clients and over SFr300 million ($334 million) in assets under management within the first nine months, currently growing at around SFr30 million a month.
What are the prospects for wealth management in the
future, bearing in mind a new social and economic environment
Wealth management has a bright future. It can support wealth inclusion through financial health and planning tools, via embedded finance models and hybrid wealth products. The need for such tools was highlighted recently during the COVID crisis which demonstrated that much of the population could not sustain a three- to six-month period without an income stream. For many, survival depended on savings and investments without these. Simple wealth accumulation tools are essential. In addition, there is also a looming pension gap in the Western world. Professional wealth decumulation tools are important.
Simple wealth accumulation and decumulation products can, and should, be offered by regulated financial institutions through their platforms, but it doesn’t stop there. More non-bank companies offer financial services, such as payments, and lending. These consumer-driven platforms embrace embedded finance; increasing client convenience by providing users with relevant financial services, at the time they need them, over the right channel, and tailored to their context. There are many use-cases for the wealth industry - or Wealth Management-as-a-Service (WmaaS) - but, from a financial well-being and planning perspective, others are with employee platforms, with consumer platforms, health insurance providers and also alongside pension and life insurance products.
Wealth solutions should also clearly support the ESG [environment, society and governnance] movement, taking into account non-financial sustainability factors. Financial institutions increasingly demand tools which enable their clients to build smarter portfolios and comply easily with ESG regulations. Wealth managers can better understand the true social and environmental impact of companies and build portfolios that better match their client’s preferences and concerns, whilst reporting to them in a simple and intuitive way.
What sets you apart from your peers and
Our products sit upon our cloud-native, wealth platform, Digital Financial Suite (DFS), an orchestration layer that sits between client interaction channels and systems of record. As a result, DFS enables financial institutions to simultaneously deliver multiple highly-engaging experiences while data is seamlessly run on one platform. Although systems of intelligence are increasingly adopted elsewhere within other financial industries, we think DFS is the first and only wealth platform adopting this approach.
Building upon DFS’ value, in April 2021 we launched our Embedded Finance and Banking-as-a-Service models. Like DFS, these utilise our extensive ecosystem of partners to support the growing need for Wealth Management-as-a-Service (WmaaS).
Our Embedded Finance model offers a range of wealth management products that make it easy for financial and non-financial institutions to embed investment services into their customer proposition. We offer end-to-end wealth services that a brand can easily include, either tightly integrated into an existing journey, or as standalone services. At additiv we provide the orchestration platform and works with regulated finance partners to fulfil the complete customer journey.
Our Banking-as-a-Service (BaaS) model also utilises DFS. It links regulated wealth management services with the brands that wish to embed them into their offering. In practice, this means providing APIs for interaction and the intelligence to integrate services in context-relevant user journeys.
Our conversations with FIs and consumer platforms or large employers indicate that no other vendor is supporting WmaaS fully. In fact, a Geneva-based consultancy called aperture recently rated additiv as a top "Transformer", stating: “In terms of business model enablement, we see additiv as best-in-class. The solution can be deployed with out-of-the-box user agents or headless, using existing or third-party customer interaction channels. This makes the solution ideally suited for wealth management-as-a-service models.”
To whom do you look for inspiration and
One inspiring story is The Ocean Cleanup who are cleaning up our oceans and educating a global audience on what’s needed to prevent plastic pollution in the ocean. Its founder, Boyan Stat, conceptualised the idea about 10 years ago, after discovering more plastic than fish while diving in Greece at just 16 years old. This discovery led him to investigate why clean-up projects were unsuccessful, and what could be done to change that. His research uncovered a new way of ridding the ocean of plastic, through a passive system using circulating ocean currents to transport and trap ocean contaminants. This is a story about having the confidence to ‘think big’ and having the confidence to push for what you believe in.