Klarna Fights Back, WealthTech Empowers Advisers, and a Call to Bridge Client Expectations ?
Advisers scramble for more client-facing time, Klarna looks to set the record straight and a subtle reminder to take all of your clients on your WealthTech journey.
Demand for WealthTech is as strong as ever, with the second annual Orion WealthTech survey highlighting an insatiable appetite for new tech. Of the 1500 financial advisers questioned, just 10% said they had all the required technology solutions.?
No surprise then that the average financial adviser is still spending one-third of their day on relatively mundane tasks that could be (should be?) switched to automated technology or outsourced.
Surprisingly, the financial advisers involved in the survey are only using, on average, 62% of the in-house tech available. Considering that only 56% is integrated, this is a growing problem. So what’s the solution?
As regulators continue to squeeze financial advisers, creating more responsibilities, liabilities and costs, outsourcing to cutting-edge WealthTech services is growing. Of those questioned, these are the levels of partial outsourcing:
?? 46% compliance
?? 46% portfolio accounting
?? 38% investment management
?? 36% trade execution
?? 34% client reporting and communication
Interestingly, 76% of those questioned are already focusing on behavioral finance or plan to do so in the next three years. They believe this will strengthen client relations, deepen client trust and enhance client confidence during market volatility.
As the compliance net closes, clients demand more personalization, and financial advisers scramble for more client-facing time, interest (and investment) in WealthTech is still strong.
Under pressure from regulators and facing criticism in the mass media, all ahead of a potential 2024 IPO, we’re not surprised to see Buy Now Pay Later giant Klarna fighting back. The company has taken to educating the wider public by creating WikiPink, which is targeted at the US market but also offers insight into the company’s global workings.
Taking a “what can’t speak can’t lie” approach, the new section on the company’s website is littered with a range of eye-catching statistics. Comparing Klarna’s traditional 4-stage payment service (K) to US consumer credit (US), there are some interesting figures:
???? 41% of American credit card debt is carried on month-to-month
?? 96% of Klarna credit is paid off early or on-time
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???? 10% of credit card users have moved to debt collection in the last 12 months
?? 2.5% of Klarna transactions were referred to debt collection
???? $6000 is the average outstanding US credit card balance
?? $150 is the average Klarna balance
Looking at the wider picture, the global default rate for Klarna’s services is less than 1%, which would appear to contradict sensationalized media headlines.
As ever, there are pros and cons regarding any financial service, especially those involving short-term credit. Now that the company has started fighting back against highly critical media, will internal wranglings be resolved ahead of a much-anticipated IPO?
We’ve all been there: done something we thought was exceptional, given ourselves a pat on the back, only for others not to “get it”. This brings us to the world of WealthTech, where the benefits seen by financial advisers may be different through the eyes of your client.?
Perception, expectations - there are many ways to describe it - but it is potentially a small but important disconnection.
An article on the Wealth Solutions Report website is an interesting reminder for those pursuing WealthTech perfection, remembering us to bring all clients along on your journey!
Focusing on high-net-worth individuals is understandable, but what about the midrange/middle-class investors, the potential high-net-worth individuals of tomorrow? It seems many are feeling left out with reduced engagement and a lack of access to the much-vaunted personalized service experience.?
Whether these clients develop into the high-net-worth individuals of tomorrow is irrelevant; there is huge potential income available today.
WealthTech is revolutionizing the world of finance. Introducing services such as wellness checks and investor education solutions while using behavioral science to create personalized journeys is pushing boundaries.?
The danger is becoming disconnected from trailing clients, low-hanging fruits, some might call them, leaving a window of opportunity for your competitors.
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Love the insightful roundup, Larry! Have you considered leveraging predictive analysis to identify emerging FinTech trends, enriching your content strategy by creating personalized, dynamic content streams that resonate with specific audience segments?