“I know a couple of the banks here have been experimenting with Ripple for things like trade financing.”
However, local wealth-management companies and pension funds are fairly conservative and skeptical about emerging trends. They are still very interested and want to be involved, but are not necessarily early adopters. They’ll be looking very closely at what’s developing both in Australia and, more specifically, in other parts of the world.
“There will be some applications for blockchain-related technologies in the custody-reconciliation and -processing parts of the wealth-management operations.”
Australian FinTech startups: Movers and shakers
With respect to consumer-facing pension funds, players include Spaceship and GROW Super funds.. Other similar companies include Future Super and Good Super.
In the robo-advice space is Stockspot, Clover, SelfWealth, and some other firms that are disrupting the industry.
On an analytics side, Stephen had a chance to collaborate with Laneway Analytics, which is looking at developing analytics and dashboards as a service. On the product side, Stephen is involved with Optimum Pensions which has developed an innovative pension that has investment flexibility and longevity protection.
And another thing that is emerging in Australia is third-party administration, which comprises actual registry systems that aim to eliminate the inefficiency of legacy systems. Companies such as Capital Road and Recreo have, in the last couple of years, aimed to offer much more modern database structures and very open API technology that are hoped to replace some of the legacy systems.
A company called PractiFI is using Salesforce by tailoring it specifically to wealth management and the financial advice industry. Several others are emerging in the CRM space.
Besides WealthTech, there are a number of other players exploring more of the RegTech side using AI and machine learning. Red Marker is one such company. They offer real-time compliance monitoring from financial advisors, rather than just reviewing files after the fact.
There are also a couple of FinTech-specific incubators in Australia. The biggest is called Stone and Chalk, a FinTech hub that has several big pension funds, banks, insurance companies behind them. Finally, FinTech Australia is an industry association that promotes innovation and is open to partnering with interesting companies.
Further development of wealth management
Two key areas are likely to see the best use made of technology to reduce costs and friction.
First, for many decades, much of the back office hasn’t changed at all. A lot of paper is still being shuffled around. Additionally, costs can be lowered using distributed ledgers, AI to improve processing, or APIs to better integrate multiple systems. This should in turn improve the customer experience.