Bankers and financial analysts who believe that internet giants such as Google and Facebook cannot enter the highly regulated and low margin business are likely to witness something they have never seen. Any bank or financial institution that has not prepared itself properly will have no place in the industry if it happens in the near future. In addition, the importance of banks will decline in the coming years. The rising cost of capital is likely to curtail the ability of most banking institutions as well as insurers that provide and recycle capital. Rising to this challenging situation, it implies that most competitors will opt to build their brands online so that they can have a slice of the financial pie to strengthen their businesses. According the PwC, the future of asset management has the skill set that Google and facebook think of bringing into the industry.
What should we expect from asset management in 2020?
In the year 2020, technology will play a very important role as far as cost efficiency is concerned. With the technological developments in place, the use of data will differentiate between the winners and losers in 2020. Most of the clients from all over the world would expect firms to be in a position of identifying their needs using data mining as well as social media to offer products and services in good time. In addition, the distribution map will undergo changes and portfolio level disclosure will end up demanding increased capabilities to manage fund data. Furthermore, CRM capabilities will be very important for operating model efficiency as well as customers’ satisfaction.
Collaborating with Google or Facebook sounds interesting to wealth managers. However, why would facebook or Google think about partnerships? Some experts argue that Google or Facebook can grab the opportunity instead of entering into partnership with other companies. Although regulation is great barrier in the industry, it is surmountable. For your information, Google an amazing track record in not only implementing change but also overcoming obstacles than most of the financial institutions from different parts of the globe.
The next group of wealthy investors will have a lot to make them happy with facebook and Google. It will even be better if Amazon decided to join them because it will assist investors to buy conveniently thus saving more money at the end of the day. Facebook will provide a good platform for contacting friends as well as accessing discounts offered by various brands. On the other hand, Google will help them find out anything including information on banks.
In case Google and Facebook did wealth management, do not find it strange when the rising young generation ditches banks because of their little loyalty towards them. A good number of young investors believe that banks have become irrelevant hence; there is need for something better. In fact, most of them count on tech start ups to change the way banks operate. Over 33% of the young investors predicting that, they might not require the services of banks in future.