Financial services incumbents along with early-stage startups and large tech companies are all competing in fintech. CB Insights CEO Anand Sanwal gave a 110-slide presentation at our fintech conference in New York. The full deck covered broad VC funding trends for fintech and the developments in large categories such as wealth management, blockchain, remittance tech, and insurance tech. On robo-advisors, Sanwal noted that market volatility has not necessarily been a boon to the category. "It's not all roses," he said. "There are headwinds … When market volatility picks up, people want to talk to an advisor." At the end Sanwal highlighted 9 trends we're watching that are generating excitement. The slides for those trends are included below. If you have questions, please use the hashtag. Use it on Twitter or on the mobile app, and I'll try to get to them. Please ask me easy questions only. If you like something about the presentation, please tweet it out. If you do not like something about the presentation, please just keep it to yourself. Let me jump in and we'll go through this pretty quickly, I think. So this is what we do, take lots of data and try to predict technology trends. You've seen this join the conversation piece. We have lots of great customers, many of whom are in the room.
Global banks that have a large mortgage business are facing pressure internally and externally to upgrade their operating model to save money, decrease processing times and enhance the customer experience – today it can take more than 60 days to complete a mortgage transaction. The pressure is particularly strong with FinTechs like US online lender Rocket Mortgage and UK digital mortgage broker Trussle creating a completely digital experience for prospective home buyers. Banks, therefore, are exploring everything from mature technologies like Optical Character Recognition (OCR) to more leading edge and high-tech solutions based on blockchain and artificial intelligence. While some of these solutions could dramatically impact day-to-day business for lenders and their brokers and customers, blockchain has the potential to completely transform the entire mortgage financing industry. The financial services industry is all about trust – whether relationship based, reputational, authoritative (legal) or transactional – banking today is built on trust.
By redirecting focus, wealth managers can successfully respond to challenges brought on by digital disruption, demographic shifts, and tighter regulation. Wealth managers have seen their fair share of ups and downs in recent years, and while challenges remain, advisers can drive business and growth by paying attention to demographic segmentation, how investors are using technology, and changes in regulation. In this episode of the McKinsey Podcast, Simon London first speaks with PriceMetrix chief customer officer Patrick Kennedy and McKinsey partner Jill Zucker about the North American wealth-management industry; he follows that with a discussion with senior partner Joe Ngai, on the industry in China. Simon London: Welcome to the McKinsey Podcast with me, Simon London. Today, we're going to be talking about financial advice and the people who provide it: financial advisers, or as they're sometimes known, wealth managers. Wealth management is a very big business--and also a business facing a number of challenges, such as new technology, changing demographics, and tighter regulation in a lot of countries. A little later, we're going to be getting a perspective on China. But we're going to start here in North America. For the first part of the conversation, I'm joined on the line by Jill Zucker, a McKinsey partner based in New York, and Patrick Kennedy, who's based in Toronto. Pat is chief customer officer for PriceMetrix, which provides data and analytics to the wealth-management industry.
So-called "exponential" technologies including robotics, virtual and augmented reality (VR) (AR), 3-D printing, and artificial intelligence (AI) are opening up significant areas of opportunity. Cognitive technologies such as machine learning, natural language processing, and speech and pattern recognition are being embedded in software applications, imbuing big data with superior capabilities. Blockchain, the foundation for the digital currency bitcoin, has enormous implications not only for the financial services industry, but for any company that manages a large amount of transaction data. The Internet of Things has only just begun to reveal its promise. "Anything as a service" offerings; ones that allow usage-based consumption, are likely to emerge.
Check out the session "AI in personal finance: More than just chatbots" at the Artificial Intelligence Conference in New York, April 29-May 2, 2018. Hurry--early price ends March 16. Here's what we'll be watching in the coming year. AI is sweeping across all industry sectors, including financial services. AI touches customer interactions (voice services like Siri and dialog systems), fraud detection, trading, and risk management (machine learning), and is being used to automate many back-office tasks (robotic process automation).