New investors need a system that not only tells them where to invest, but also automates investing and manages their portfolios, eliminating the need to constantly monitor stock movements. Learn more about the role of technology in personal finance.
Technology has changed global finance in multiple ways. It is now possible to deal with virtually any organization in the world in seconds. Wealthtech organizations are uniquely positioned to face a wide variety of challenges as they combine experience gained in earlier high finance models with today’s cutting-edge technology.
These businesses can partner with millennials to help them build long-term wealth by removing decision fatigue, diversifying portfolios, fostering contingency reserves, enabling price sensitivity, fostering risks, etc.
Wealthtech has changed the way consumers and advisors approach wealth management.
In an exclusive conversation with CNBC-TV18.com, Pushpendra Singh, founding partner of Centricity Wealthtech, said: “The company has been exposed to both new perspectives and new problems. This involves creating new technology applications for legacy technology companies, with a focus on data protection, predictive analytics, and other areas. . It involves financial advisors delivering value that transcends the capabilities of algorithms. The wealth management technology ecosystem improves the efficiency of financial processes by delegating responsibilities traditionally reserved for experts. It changed the investment environment as well as people’s ideas about modern money.
Using Quantitative Investing to Facilitate Investment Decisions
New investors need a system that not only tells them where to invest, but also automates investing and manages their portfolios without requiring them to constantly monitor stock movements.
According to Singh, these investors are increasingly interested in quantitative investing, which bases investment decisions on numerical analysis.
“It is based on extensive statistical analysis and frequently requires the creation of complex models and algorithms to assess markets, asset valuations, volatility and other investment factors. Traders typically select an algorithm based on ‘quantitative analysis with predefined rules for buy and sell signals’, Singh says CNBC-TV18.com.
The wealth management industry in India is facing various hurdles, ranging from increased competition to regulatory reforms. As more players enter the market, competition for customers increases, putting additional pressure on fees and services.
“The success of wealth management technology in India has mostly been limited to solving the problem of affordability. Some obvious factors are working against India, such as the depth of the investor class or the relatively low disposable income of the country compared to the U.S. At the same time, problematic structural and behavioral factors are affecting the Indian landscape,” Singh explained.
Inability to adapt to complex regulatory frameworks, lack of alignment with client interests and rising costs are examples of value gaps in wealth management, and HNIs/UHNWIs in India are the most digitally underserved for their financial management needs. There are many challenges, such as the lack of digitization of customer experience and processes such as onboarding, analytics, and fulfillment. Existing challenges have been exacerbated by a rapidly changing regulatory framework, he added.
In India, there is an urgent need to empower independent financial distributors so that investors can achieve better results. The lack of digital awareness among clients and respective independent financial advisors makes deeper penetration – where there is potential – even more difficult.
First post: March 29, 2023 6:18 p.m. STI