ASIC pens fintech innovation deal with Abu Dhabi

 

The corporate regulator has entered into a cooperation agreement with the Abu Dhabi Global Market (ADGM) Financial Services Regulatory Authority (FSRA) to support and understand financial innovation in each jurisdiction.


In a statement today, ASIC said the Middle East and North Africa (MENA) are currently poised for a fintech boom, with several cities taking steps to establish themselves as fintech hubs.

“This Agreement expands ASIC’s fintech cooperation network to a dynamic region with enormous potential,” ASIC said in the statement.

The deal means Australian fintech businesses wishing to operate in the Abu Dhabi Global Market will now have a simple pathway for engaging with the Financial Services Regulatory Authority, and vice versa.

Similar to the other fintech cooperation agreements ASIC has entered into, this agreement will enable the FSRA and ASIC to refer innovative fintech businesses to each other for advice and support via ASIC’s Innovation Hub and its ADGM equivalent, the Regulatory Laboratory known as ‘RegLab’.

The agreement also provides a framework for information sharing between the two regulators which will enable ASIC to keep abreast of regulatory and relevant economic or commercial developments in the ADGM and to use this to inform Australia’s regulatory approach.

Signing the agreement, ASIC chairman Greg Medcraft said, ‘Fintech developments are not confined by national borders. Each country and region has a different experience with fintech, and there is much we can learn from engaging with one another.”

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An opportunity for wealth managers to better service Millennials

In a market where many competitors have left Millennials in the too hard (or too poor) basket, progressive wealth managers have an opportunity to stake their claim.


Fear of missing out, aka FOMO, is a constant in life for Millennials. Several social media platforms provide a steady stream of proof that other people are out there, doing fun things that they’re not. But does this apply to investing? Do Millennials feel like they are not being serviced according to their needs and preferences? For what we know, this seems to be the case.

According to a Deloitte study on wealth management and Millennials, nearly six in 10 people of this generation would change his or her bank relationship for a better technology platform solution. In a different report, by Telstra, researchers found that 67 per cent of this generation prefer to receive advice on financial products and services via a digital platform.

Taken together, these two statistics provide two important insights for wealth management services in Australia: one, there’s a big gap in the market at the moment to service the needs of Millennials and, two, there’s an appetite for digital engagement coming from the same group.

Why the appetite? Older generations often want to ‘eyeball’ the person they’re handing their savings to in order to build trust. But if you’ve ever dealt with anyone under 35, you’d know their preference for texting rather than actual phone calls – so a face-to-face meeting is probably not appealing.

Having grown up handing over their data, photos and friendships to digital companies, Millennials don’t need to shake your hand to feel a level of trust.

Why the gap? For most wealth managers, the numbers don’t stack up. With only a small amount to invest (compared to their parents’ generation), the potential revenue from Millennials doesn’t make the cost-per-acquisition worth it.

Moreover, convincing Millennials to part with thousands of dollars for advice is a challenge, when more than two in three don’t own their home and are struggling to save for a deposit.

This hardly comes as a surprise, considering the limited opportunities this generation has to invest beyond a savings account. Minimum investments and management fees are generally too high for them. Plus, the ‘one size fits all’ products hardly ever adapt to their reality.

What’s the solution? In a market where many competitors have left Millennials in the too hard (or too poor) basket, progressive wealth managers have an opportunity to stake their claim.

Quantifeed’s B2B wealth management technology helps banks, brokers and wealth managers target the burgeoning mass-affluent market of Millennials, providing the best possible solutions in a scalable, lower-cost model, so that the numbers do stack up.

With a combination of low-cost quantitative portfolios, a goal-based investment approach and engagement technology, Quantifeed is helping financial institutions across Asia-Pacific to better service this market segment. Millennials now have an opportunity to invest in a range of assets that may speed up their saving for a home deposit.

To seize the opportunity, here are a couple of ways wealth managers in Australia can ride the coming wave of millennial wealth:

1. Look at the long game – While Millennials are struggling to balance their savings, side-hustles and smashed avocado today, that won’t always be the case. By 2020, their wealth is expected to double from present levels across the globe. Digital advice allows wealth managers to start building relationships with customers today, rather than try to win their trust once their wealth has increased.

2. Focus on the user experience – Clunky design and websites that don’t work on mobiles are the fastest way to turn off younger investors. Nine out of 10 Millennials check their smartphone as soon as they wake up, so it’s crucial to design your platform functionality with a tiny screen in mind. These types of decisions are where many financial service providers come unstuck, and it’s why we have built our business on providing highly configurable mobile friendly white-label technology – ensuring a rich user-experience no matter whether your platform is used on a smart phone, tablet or desktop computer.


graeme brant

Graeme Brant is the senior executive strategic partnerships at Quantifeed.

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SuiteBox gets new CRO

SuiteBox has announced the appointment of Matt Cave to the position of chief revenue officer. The appointment comes as Suitbox prepares for global expansion.

Prior to his appointment, Mr Cave was the general manager of ASX-listed company IVE group and was also the CEO of his own startup, adding up to more than 20 years of experience in the sales and marketing field.

SuiteBox CEO Ian Dunbar said Mr Cave is a welcome addition into the company, especially since SuiteBox is now gearing up for global expansion.

Mr Cave commented on his appointment by saying that he is looking forward to assisting SuiteBox in their expansion efforts as the new CRO.

“The opportunity SuiteBox has provided me is incredibly exciting as well as challenging. It is exactly the project I’m seeking,” he said.

SuiteBox is a digital workspace solutions provider which operates in Australia, South Africa, New Zealand, and the United Kingdom.

 

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Netwealth exceeds $14 billion in FUMA

Netwealth has announced a rise in funds under management and administration (FUMA) as a result of “strong inflows and growth across the IFA sector”.


In a statement today, Netwealth announced it has exceeded $14 billion in FUMA.

This is due to strong inflows and continued growth across the IFA, private client and wealth management sectors, Netwealth said.

The milestone represents an increase in excess of $5 billion or 55 per cent for the current financial year, and more than 350 per cent into the Netwealth managed account service.

Commenting on the growth, joint managing director of Netwealth Matt Heine said, “We’ve had a great year which, in addition to strong FUMA growth, has seen the launch of many exciting new initiatives including a wide range of new adviser efficiency enhancements, nine new private label managed accounts and the successful transition of the Russell IQ Wealth and Super platform across to Netwealth.

“We continue to see the industry undergo a number of major structural changes including strong and steady growth of the IFA market and a renewed focus by advisers who understand the need to ‘future proof’ their business – Netwealth is well placed to partner with firms through this process.”

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Advisers must take AI seriously: Netwealth

Artificial intelligence for the advice sector is not “science fiction” and advisers need to start “taking it seriously”, with Silicon Valley firms already using it to replace the roles of fund managers, Netwealth has said.


Speaking on the Adviser Innovation podcast, Netwealth joint managing director Matt Heine said the Australian advice sector will have to become familiar with the idea of artificial intelligence (AI) and should learn from US advisers who are doing things that “blows your mind”.

Mr Heine said companies in Silicon Valley are using AI and self-learning to replace the duties of fund managers.

“One of the companies we met with, Sanlam, shared that they’re launching a new artificial intelligence investment service … it blows your mind actually,” he said.

“Every asset class has 600 self-learning algorithms running at all times. Each of those 600 algorithms then has a master algorithm which decides if it’s doing a good job or a bad job. It picks the algorithms that are doing good jobs and discounts the ones that are doing bad jobs. It then combines it with 600 algorithms from every other asset class, and has a master portfolio manager that is taking the best ideas from each of those asset classes.

“I haven’t done the maths, but we’re talking thousands and thousands of different algorithms running different scenarios in real time building your portfolios, and the performance has been absolutely outstanding.”

However, AI is regarded as simple in the US, with an expectation that it will get smarter in the next two years, according to Mr Heine.

“The thing about artificial intelligence is that, I think over in the Valley and over in San Fran, it’s still considered ‘dumb’,” he said.

“If artificial intelligence is considered dumb at the moment, but they’re expecting it to be much smarter in two years, capabilities in what we’re going to start seeing coming out in the next two years is going to be absolutely incredible.”

While the disruption occurring in the US is absent in the Australian advice sector, Mr Heine warned “it won’t be long” before Aussie advisers feel a sense of “urgency”.

“All of the things that we saw over in America are highly portable and it won’t be long before someone brings them out,” he said.

To listen to the full interview with Matt Heine, check out the latest episode of The Adviser Innovation Show:

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