Robots rocking Wealth Management?
Exciting changes are underway in the financial industry, with digitization and cloud technology still at the forefront. Despite economic uncertainty, the DACH region is leading the way with its vibrant FinTech ecosystem and WealthTech, both of which are appealing investment sectors. Wealth management firms are seeking valuable technologies to maintain their competitive edge, with a particular emphasis on AI, including conversational AI, such as ChatGPT.
In 2023, banks will continue to invest in digitizing their core processes, migrating to the cloud, and developing digital-first business models for commercial and small businesses. However, top-line revenue growth may be challenging due to economic uncertainty. And as digital banking increases, banks must address cybersecurity threats, including vendor risk management and the need for transparency. They are increasingly utilizing cloud technologies and AI projects as part of their holistic transformation efforts.
"In the face of economic headwinds, investments in digital transformation carry more weight than ever before."
The DACH region of Germany, Austria, and Switzerland is home to a vibrant and dynamic FinTech ecosystem, backed by an advanced technical infrastructure, strong human capital, and a long-standing banking and wealth management industry. According to the article,
"[F]intech funding in the DACH region remained strong in 2022, registering its second-best year to date, [...] As of November 2022, a total of 191 deals worth EUR 3.2 billion had been completed in the sector across Germany, Switzerland, Austria and Liechtenstein."
Strategic investment in DACH region FinTech increased, with the main reasons being gaining access to new technology and entering new markets and business models. WealthTech and blockchain/crypto were the most attractive FinTech verticals to invest in.
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To help wealth management firms identify the most useful technologies to invest in, Forrester released a report outlining nine technologies firms should consider. Among these, AI is playing a significant role, with a focus on the conversational AI model ChatGPT, which allows for faster information processing. However, the authors emphasize it is crucial to distinguish between genuinely effective use cases and over-hyped ones.
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