Wealth

Modern cloud computing, which in absolute timespan is still very young, has become a pretty much ubiquitous facet in our lives. Most of us now store a majority of our personal data on numerable cloud servers operated by huge companies who are now household brands. Any remaining confusion in nomenclature and etymology doesn’t reside with the young. For those of us old enough to remember floppy disks, we can still get confused by terminology. Here we look into the history and future of cloud computing.

Economic Scenario Generators (ESGs) are fundamental to the analysis of ALM problems. Oversimplifying, they are software tools that facilitate simulated analysis of economic variables and risk factors. 6 months ago, no one in the West could have predicted what we are now experiencing. Nonetheless, we are truly now in un-navigated economic territory globally. Stress-testing and scenario analysis comes in a variety of formats and styles. Many are formulated by benchmarking variability on previous events and crises. None of these would have offered any forewarning of the impending magnitude of Covid-19.  Specific predictions vary and are challenging to make, but we can be confident in seeing a record single quarter decline in global GDP. ESGs are not crystal balls and would not, ceteris paribus, have provided any direct mitigation to these challenges. However, as we prepare to make our first tentative steps into the ‘new normal’ we must surely re-evaluate the role that enhanced analytics can provide for asset allocators.

A multitude of factors can drive paradigm change. Technological innovation, improved methods and changes in demand are all common instigators of change. While all the latter means would be described as evolutionary, the impact of Covid-19 is revolutionising how we live and interact. Out of necessity, we are now deeply engaged with digital services that we hadn’t even heard of a few weeks ago. This digital awakening creates highly fertile ground for the next paradigm in wealth and financial advice. While the first wave of robo-advisory solutions aimed at promoting greater inclusion, the next wave will focus on digitally transforming the products serving traditional channels.

The financial sector continues to evolve at a rapid pace. As the digital-native generation Z open their first bank accounts and cloud-native offerings rise amidst the COVID-19 pandemic, financial institutions feel an increasing pressure to adapt to new customer demands. Although it is fair to claim that online banking services are widely available in western countries, wealth management services remain a privilege for the most fortunate. However, it has become more apparent that these services have a fair chance of being next in line to experience a dramatic transformation. In this blog entry, we discuss how recent technological advancements could result in significant changes to digitalised customer journeys in wealth management.