The demand for transformational financial services capabilities will drive growth of more than $6 billion in the global wealthtech solutions market, according to a new report.
The research cites blockchain and AI among the technology that will fuel the estimated increase in the market of more than 14% CAGR between 2024 and 2028 as the industry moves to greater digitalization, specifically improving and automating wealth management services.
Technavio says that firms including Broadridge Financial Solutions, InvestSuite, and Wealthfront Corp. are the key players in the market.
Broadridge has added to its solutions this week with the launch of Tradeverse to help trading firms eliminate data silos, unleash the potential of their data across the enterprise and better manage costs, reconciliation, and the data quality and lineage challenges of firms typical complex platform ecosystems.
"A Tradeverse implementation we've recently completed with a global bank is proving the power of harmonizing trade data," said Hugh Daly, Head of Data and AI, Capital Markets, Broadridge. "The solution delivers efficiencies for their regulatory reporting and compliance teams, allowing direct access to the data for business users initiating complex searches using natural language."
Wealthtech solutions typically work with robo-advisors, digital platforms, and fintech applications, enabling them to provide low cost and efficient personalized investment advice, automated portfolio management, and streamlined financial planning. Also, startups are partnering with established financial services providers in areas like retirement savings, estate planning, and legacy planning.
Technavio’s report highlights growing client demand for digitalized services by younger clients.
North America is expected to be the main driver of the wealthtech solutions market growth in the next four years, accounting for 53%.
Cryptocurrencies, ETF providers and property management firms are also exploring blockchain technology for secure transactions and transparency.
“Overall, the Wealthtech market is poised for continued growth, driven by the increasing digitization of management and the internet penetration in various sectors,” the report states.
However, the expected growth phase is not without risks, specifically rising data security and privacy concerns: “concerns regarding data breaches and security remain a challenge that wealthtech providers must address to maintain client trust. Thus, such trends will shape the growth of the market during the forecast period,” Technavio says.
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