Wealthtech is truly booming - to the tune of more than $42 billion in growth nationwide by 2028. On the back of a barnstorming 2021 (where funding in the niche breached $14.5 billion), the future's bright. But what are startups doing to make wealthtech appealing to businesses and consumers? With three-quarters of all Americans already using associated platforms, we're in the eye of the storm.
What is WealthTech?
To better understand wealthtech as a concept, we need to understand the role of wealth management in society. As the name suggests, wealth management concerns planning for high or significant sums of money. Consumers, for example, employ wealth managers to help map out investments and portfolios.
Wealthtech, therefore, applies technology to the scenario. The umbrella term can cover various services and programs that help people grow their money. For example, this may include trading networks, real-time stock advice, retirement planning apps, and more.
Crucially, wealthtech exists as a strand of fintech. Fintech's overall goal is to help make money matters accessible to all. This could be through simple banking apps, careless payments, and robo-advising on complex investment matters.
Essentially, the term 'wealthtech' applies to a digital solution that strives to make traditional management more accessible. Startups dabbling in the niche intend to provide user-friendly access to extensive control and planning.
'Financial wellness' is an aspect of modern living that many people feel they need to improve upon. Statistics show that an estimated 38% of Americans surveyed have financial plans in place. As such, there is a growing thirst for wealthtech innovations. What is more, wealthtech platforms do not all arrive in the same shape, size or flavor.
Key Trends in WealthTech
To better understand the upward trajectory predicted for wealthtech growth, it's crucial to consider emerging trends. Platforms and services such as digital brokerages have emerged as significant drivers of interest in the technology. Drilling deeper down into consumer pain points, we can clearly see features that appear most appealing to everyday users.
Personalization is Key
As technology advances, so does consumer demand for more intelligent convenience. While modern wealthtech brokerages offer exceptional convenience by default, personalization is quickly becoming a must-offer. Millions of people use highly personalized apps and programs daily. For example, social media tailors advertising to search habits, and e-commerce presents recommended purchases to regular buyers.
Within wealthtech, personalization may fall into a concept as simple as the robo-advisor. A robo-advisor is an AI code that determines investors' attitude to risk and their desired financial outcomes. Some wealthtech platforms and robo-portfolios, for example, may ask new users to complete short questionnaires on registration. The answers they provide can effectively help train the AI to make significant decisions regarding investments.
Ventures in wealthtech, as a result, may consider this form of machine learning extremely appealing. AI allows investors to take their 'hands off'. It effectively removes the risk of emotional investing and following potentially risky highs and lows in the markets. It also allows traders to set up an automated investment plan at all hours of the day.
With global markets opening and closing while we sleep, this technology ensures users always have access to the best opportunities.
A Seamless User Experience
Just as global search - and the web generally - is pivoting more to the average user than ever, so is wealthtech. In the New 20s, the user is king or queen, making accessibility a top priority. While personalization offers high convenience, modern wealthtech is easier to get into than ever before.
Deciding what to do with large sums of money is still a monumental task. However, ventures in wealthtech may counteract this by providing intuitive charts and guides. Users can access portfolio options and extensive long-term planning with a few taps and swipes. What may previously have taken years to learn now takes days.
Seamless user experiences mean wider audiences take advantage of wealthtech innovation. Modern traders come from all walks of life and are of all ages and interests. Small brands working in the niche intend to keep breaking down barriers to ensure wealthtech stays open. This is crucial, of course, to continue growing the industry at home and abroad.
Cybersecurity Matters
Cyber-attacks are, regrettably, often underestimated. The slow, steady growth of Web 3.0 into 4.0 may have taken some businesses and corporations by surprise. This is no excuse, of course, as asset management firms owe a duty of security over their clients' money. Sadly, asset security has been remarkably undervalued in recent years.
As a knock-on effect, modern wealth management consumers demand greater security. Traditional financial security is no longer enough to protect digital assets from evolving threats of hacking and fraud. Ventures operating in wealthtech, as such, look to provide greater confidence to users by incorporating various new cybersecurity trends.
Further, more control is offered to users concerning asset planning and management. Users of popular apps and programs can easily track their money and where it's going. Wealthtech innovators are also providing enhanced encryption facilities to service providers. Confidence in security is essential on both sides of the transaction.
Conclusion: Where Are Startups Taking WealthTech?
Wealthtech is undeniably on an upward trend. Current global financial strains are pushing more people to consider new income streams. Beyond this, those already managing wealth are seeking new ways to make their money grow faster and healthier than before. Ventures - those that have been funded and otherwise - are tapping into a public demand for even greater convenience.
This demand is not too difficult to understand - and 'app culture' has much to play in its growth. Money matters shouldn't have to be complex, and that, effectively, is the ethos of many working in the sphere. Startups operating in wealthtech look at new ways for people to make their money go further. Quite how this will look in a decade is worth holding out for.
Topic: WealthTech Startups
