The evolution of fintech and its impact on advisers

The financial industry is no stranger to change. But recently, it’s experiencing a seismic shift driven by financial technology. Including everything from digital payments to robo-advisors, ‘fintech’ is reshaping the delivery of financial services and clients’ expectations.    

Its impact is clear. Stats suggest that fintech revenues will grow almost 3x faster than traditional banking by 2028. The result? A potential 15% annual revenue growth vs 6%, respectively.   

For IFAs, understanding and integrating fintech innovations is no longer optional. It’s essential for staying competitive and delivering value. 

This explosive growth is fuelled by several key factors. More savers – especially younger investors – demand convenient, digital-first solutions. The financial services industry is also rapidly embracing digital transformation, while more investment is pouring into fintech startups and innovations. 

For IFAs, this growth is double-edged. On one hand, fintech is introducing new players who can deliver financial services more efficiently – often for less money. On the other, it lets you enhance your services, streamline operations, and better meet your clients’ evolving needs. 

Key fintech innovations  

Fintech is more than eye-catching apps. It’s a toolkit that can change your client service. Here are five recent innovations:  

Digital wealth management tools  

The latest digital platforms offer real-time data, advanced analytics, and comprehensive portfolio management solutions. Deliver more personalised investment strategies, precisely track performance, and engage clients with interactive reports and dashboards. It’s about making your service effective, more transparent, and attractive. 

RegTech 

Regulatory technology, or RegTech, can simplify the ever-growing complexities of financial compliance. These tools can automatically monitor transactions and manage documents so it’s easier for you to stay on top. With RegTech, you can reduce the risk of non-compliance, keep up with regulatory changes, and free up valuable client time.  

Portfolio management  

These apps pull all your client’s investments into one easy-to-view dashboard. They streamline tasks like performance tracking and goal-based planning, so you can manage portfolios more efficiently and keep clients informed. 

Investment analytics 

Going beyond just tracking returns, investment analytics use advanced models to uncover patterns, assess risks, and optimise asset allocation. They enable you to fine-tune your clients’ portfolios, so they match their needs more precisely. 

Risk tolerance analysis  

Understanding a client’s risk tolerance is key. These tools help you assess how comfortable your client is with market ups and downs, and aligns their investments accordingly.  

The disruption advantage 

The "disruptive" label often associated with fintech might sound like a threat. However, it's actually a catalyst for positive change in several ways.  

Enhanced client experience 

By integrating fintech tools, you can deliver a more personalised, efficient, and engaging client experience. In a crowded field, this can lead to increased client satisfaction and loyalty. 

Operational efficiency 

Automating routine tasks frees up your time for more complex or value-added services, increasing your productivity and profitability. 

Competitive advantage 

Early adopters of fintech can differentiate themselves from the competition and position their practice as forward-thinking and innovative. 

For clients, fintech means accessibility and convenience. They can monitor their investments, receive advice, and carry out transactions using their smartphones. The result is a more educated, aware, engaged and satisfied client base. 

For the industry, fintech drives innovation across the board. Traditional financial institutions are forced to evolve, leading to better services and products that benefit everyone in the ecosystem. 

Integrating fintech 

Successfully integrating and adapting to fintech requires a strategic approach. 

• Assess your needs: Identify areas where technology can enhance your business, whether it's improving efficiency or enhancing client service. 

• Research and select tools: Evaluate fintech solutions based on your specific needs, budget, and technical knowledge. Think about ease of use, security, and integration. 

• Develop a comprehensive strategy: Create a roadmap for fintech adoption, outlining the steps involved, the resources required, and the expected outcomes. 

• Train your team: Make sure your people are equipped with the knowledge and skills to get the full benefit from fintech tools. 

• Communicate with clients: Clearly explain the benefits of using fintech to your clients and address any concerns. 

The future of fintech 

As technology evolves, the fintech landscape will grow with it. Keep an eye on these emerging trends: 

Artificial Intelligence 

For the financial industry, AI-powered tools will continue to learn and develop. The outcome is likely to see more robust decisions and accurate predictions about future market movements.   

Hybrid working 

As the industry matures, we can also expect greater collaboration between traditional financial institutions and fintech startups, leading to the development of new, hybrid models of service delivery. 

The takeaway is that fintech isn't here to replace financial advisers. It's here to empower you. By integrating fintech thoughtfully, you can enhance your value proposition, improve client satisfaction, and thrive in an increasingly digital world.