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30 August 2018 Multimedia

Fintech Disruption: A Glimpse into the Future?

  1. Water Cheung, CFA
  2. Phillip Yoon
  3. Paul Schulte
  4. Saeed Hassan
  5. Henri Arslanian

The Hong Kong Society of Financial Analysts recently conducted a series of interviews with Fin Tech experts in Hong Kong. Unanimously, their view was that FinTech will impact all corners of the finance universe, from asset management and wealth management, through to compliance and regulation.

There are seven videos in the series, all about 4 to 5 minutes in length, so taken together they offer a 30-minute look at the future, as effected by FinTech disruption.

Fintech Disruption: A Glimpse into the Future?

By Neil Govier

As discussions continue regarding the most likely impact that FinTech will have on the asset management industry, the Hong Kong Society of Financial Analysts (HKSFA) recently spoke to several experts in Hong Kong to get their views on this and other questions, such as what the industry will look like in 10 years.

Need we be worried or will the future hold new opportunities?

The responses are really a bit of both. There will be opportunities for those businesses that embrace the potential that FinTech, in all its varied aspects, can offer but along the way there is predicted to be fewer employment opportunities.

The role of research analysts, as we understand it today, could be the first casualty as data and data analytics become more commonplace and cheaper. Although there appears to be unanimity regarding the continued importance of personal relations in the high end of the wealth management industry, the lower end of the spectrum and the mass affluent will have to get used to dealing with machines rather than people. Increasing people will be replaced by technology.

More positively, it is forecast that the real winners from the FinTech revolution will be the consumer who will be offered new and more suitable products at lower costs, on a block chain structured dealing and settlement platform. This will, in turn, lead to a growth in assets under management, especially as investors with less wealth gain greater access to the investment industry.

As technology improves the distribution channel and drives customer growth, which firms will benefit? The short answer is those that can embrace the changes on a large scale, possibly resulting in the asset management industry being dominated by large global players who can reach out locally from a major financial hub such as Hong Kong.

In summary, FinTech should enrich the lives of customers but leave some pain in its wake for some current industry players.

Key Takeaways

1) As the potential promised by FinTech becomes realised there will be structural employment changes even as assets under management increase.

2) The asset management industry will become more commoditized by FinTech and, as a result, reach more people.

3) Understanding and embracing the changes brought on by FinTech will be the only way for firms to survive and grow.

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