Future Planning: 5 Trends for Planning FinTech’s Next 5 YearsFuture Planning: 5 Trends for Planning FinTech’s Next 5 Years
Technology is only going to play a larger role in the success of financial advisory firms in the coming years.
By F2 Strategy Research
The next five years will be a major turning point for technology for financial advisory firms. With robo advisors getting established, no-fee trading platforms sprouting up and more startups than ever launching in the wealthech space, it's imperative to be on top of the latest trends.
Here, F2 Strategy Research details what advisors need to keep their eyes on going forward.
F2 Strategy Research is the propriety research division of F2 Strategy, a leading global strategy consulting firm, delivering intellectual and advisory-based research on technology and business issues impacting the RIA, wealth, bank/trust and family office industries. With expertise spanning across the wealth management sector, we provide an unfair advantage to our clients and partners by illuminating industry gaps and delivering insights to help their businesses make great decisions.
September 11, 2020
Trend 1: Tech Spend Increases to "Keep Up" Rather Than "Get Ahead of the Competition Next Year
In 2021, 81% of firms expect to increase their tech budget more than 5% over 2020. By F2 Strategy Research
In 2021, 81% of firms expect to increase theirtech budget more than 5% over 2020.
Critical Issues:
Firms say drivers of tech spend are primarily based on keeping up with competition and client expectations versus exceeding them and achieving growth.
Predominant focus on tech growth is on improving experiences—improving digital, frictionless client/advisor experiences, integrating platform and ensuring scalability/growth support.
Post COVID-19, boards clearly commit to spend more on tech.
Increased spend is now critical to survival of the company unlike in previous years
First must spend wisely and have good counsel.
F2 Strategy Research, a division of the global consultancy F2 Strategy, delivers intellectual and advisory-based research on technology and business issues impacting the RIA, wealth, bank/trust and family office industries.
Trend 2: CTO Transitions from Order Taker to Strategic Leader
The desire to embed technology into the foundation of the business grows. By F2 Strategy Research
Critical Issues:
Firms are working out how to articulate the need for tech as a business case
Firms need to show the value of tech beyond traditional ROI
Firms have struggled to align tech to the client experience—other industries are ahead of finserv in this area
F2 Strategy Research, a division of the global consultancy F2 Strategy, delivers intellectual and advisory-based research on technology and business issues impacting the RIA, wealth, bank/trust and family office industries.
Trend 3: Firms See Digital Experience as Cornerstone for Innovation
Financial services firms’ planned priority areas over next five years. By F2 Strategy Research
Critical Issues:
Client experiences will be increasingly digitally interactive and on demand
Firms expect tech enhancements to lead to more diverse and global client bases
After a disruption comes a period of transition; firms should act now to improve marketing and branding to prepare for the transition
F2 Strategy Research, a division of the global consultancy F2 Strategy, delivers intellectual and advisory-based research on technology and business issues impacting the RIA, wealth, bank/trust and family office industries.
Trend 4: The Biggest Unknown—Will the Economy be a Roadblock to 5 Year Visions?
The long-term impact of COVID-19 remains a question mark. By F2 Strategy Research
Critical Issues:
Firms, still reeling from the sudden instability caused by the pandemic and it’s largely unknown long-term impact, question whether it makes sense to plan five years out anymore
Economic uncertainty is a potential roadblock to appropriate staffing, large investments in tech and the capacity to take on multiple transformative projects
Other concerns that could derail 5-year visions include the future regulatory environment, M&A and changes to competitive landscape and unanticipated disruptive technology
F2 Strategy Research, a division of the global consultancy F2 Strategy, delivers intellectual and advisory-based research on technology and business issues impacting the RIA, wealth, bank/trust and family office industries.
Trend 5: No Lack of Blame—Firms Fixing Many Problem Areas to Improve Project Execution
Primary drivers of project delays and cost overruns by firm size. By F2 Strategy Research
Critical Issues:
While reasons why project execution misses the mark vary by firm size, across the board, firms cite the need to address poor training and adoption
Communication and transparency between tech groups and business groups are keys to improvement
Speed is lacking—only 14% of firms fund tech projects within two weeks; 47% take 3+ months.
Can agile firms do it better?
F2 Strategy Research, a division of the global consultancy F2 Strategy, delivers intellectual and advisory-based research on technology and business issues impacting the RIA, wealth, bank/trust and family office industries.
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