The most significant trends in the financial services and fintech sectors over the past year have included greater adoption of the cloud and other digital technologies, commission/fee compression and consolidation, according to Fred Duden, global head of product development at fintech firm Broadridge Financial Solutions. And he predicted those trends will continue into 2020.
The shift in recent months to commission-free trading by firms including Charles Schwab, Fidelity, TD Ameritrade and Wells Fargo means that “we’re seeing a [larger] focus on managed accounts, rebalancing and how” these firms can “compete from an advice perspective in a scalable way,” he told ThinkAdvisor.
At the same time, fintechs and the major players in financial services are “looking at how they can leverage” digital technology and hybrid, omnichannel strategies, he noted.
And that stands to significantly help Broadridge, which provides investor communications and technology-driven solutions to firms including broker-dealers, banks, and asset and wealth managers.
In particular, Duden predicted there will be a “continued focus” by financial services and fintech firms on digital technologies that help them optimize workflows for advisors and clients. “One of the things I think that the industry is realizing is that digital is about attraction and retention of clients,” he said. As an example, he pointed to the convenience of online bill payment as one way that banks are retaining their customers. “All your bills are set up there. Everything’s cohesive [and] it’s easy,” he noted.
Wealth management firms are increasingly realizing they can use similar methods to retain customers through mobile apps on customers’ cellphones and websites on computing devices in general, he noted.
With artificial intelligence and machine learning adoption, meanwhile, “it really comes down to defining the use cases that are appropriate for” a financial services firm to use those technologies, as well as blockchain, he said.
One factor that could be playing a role in how quickly firms in the sector adopt those technologies is whether they have the infrastructures in place to support them, he noted.
“A lot of clients are going through a modernization” that often includes “cloud journeys associated with upgrading and modernizing their stack of technology that they use — both from an application tier and from an infrastructure perspective,” he explained.