Open Finance and wealth management: A revolution in-waiting?
In this feature from AltFi’s Digital Wealth State of the Market Report 2020, Nutmeg and Crealogix CEOs discuss the Open Finance opportunities ahead.
This is an excerpt from AltFi’s Digital Wealth State of the Market Report 2020, which is available for free here.
Digitally supported advice, faster onboarding of clients, and trading with credit are how Open Banking and Open Finance could benefit the wealth management industry, but only if they are embraced.
Public awareness of Open Banking—a Competition and Markets Authority initiative devised to increase competition and improve services—and Open Finance remains low, experts say, and consumers have concerns about sharing financial data.
But with a steady increase of 160,000 users a month, it seems likely that PwC’s estimate that more than 33m people will have signed up to Open Banking driven services by 2022 will fall short.
Its proponents, though, continue to extol the virtues of Open Banking and Open Finance, and the likes of Yolt and Yapily have scored Open Banking tie-ups, looking to speed up its adoption.
Simplicity and cost-effectiveness
“Customers want the greater transparency offered by opportunities in Open Banking, and Open Finance beyond that, so businesses will need to adopt and do it fast.”
The tie-up allows Moneyfarm customers to make withdrawals or top-up from their investment portfolios directly to and from their bank accounts, without the need for card payments.
David Joyce, UK CEO of Crealogix, cites several benefits Open Finance can serve to the wealth management industry, like creating personal balance sheets of an individual’s wealth which could significantly help consumers and investment managers.
“Then they [the individual] can choose to do one of two things with that. They can choose to self-serve and or they can work with a third party, a financial advisor, an investment manager, armed with much more information than perhaps they would have in the past,” says Joyce...
Want to keep reading? Find the full feature in AltFi’s Digital Wealth State of the Market Report, out now!