Trends in Fintech Software: Few Observations on Wealthtech and Traditional Bank Imperatives in 2021

Trends in Fintech Software: Few Observations on Wealthtech and Traditional Bank Imperatives in 2021
News 07 April 2021

By 2021, fintech has become such a broad term, that the company operating in this sector could do literally anything. 

The peer-to-peer lending market is somewhere at the mark from $15 billion (estimated in 2018) to $44 billion (prediction by 2024).

New digital-only banks appear now and then so regularly that the initial forecasts for a drop of just 36% in numbers of regular physical bank visitors from 2017 now look naive.

Crypto market capitalization was marked at over $155 billion by March 2020.

Artificial Intelligence and machine learning have entered the stage to reduce operational costs and help to prevent fraudulent activities. The Global AI fintech market was estimated at $6.67 billion in 2019.

RegTech (Regulatory Technology) is more than a buzzword in fintech right now as compliances are now more important than ever.

There are new players on the market: WealthTech software surged an unexpected rise back in 2020 and is expected to be a growing trend this year.

There are also countless other markets in the fintech domain, we couldn’t list them all even if we had all the blog space in the world.

In some later installments of our blog, we’ll definitely observe the major trends in the fintech industry and speculate on what are the most promising ideas worth investments in the sector. 

For now, we’ll take a random, yet promising and popular among our customers “investment and asset management industry software” which has gotten its loud name “WealthTech” and give it a closer look

In this article, we will also dive into McKinsey’s research “Cutting Through the FinTech Noise” to explore banks’ imperatives for survival in the digital world.

WealthTech - a New Holy Grail for Software Development Investment? 

Personal wealth management is now digital. Big data and artificial intelligence often serve as valuable tools in finance management, trading solutions require social network integrations for making educated guesses on successful investments.

How attractive such software for investments? Well, back in 2016 CB Insights reported $657 million in annual “wealthtech” deals, while global VC-backed wealthech funding reached close to $1.2 billion in Q2 in 2020. The numbers grew drastically in just a span of 5 years

The best-known product in the field are Robo-advisors, but the range of tools grows and innovations are welcomed to the field. Let’s observe these categories.


Robo-advisors are services that use machine learning and artificial intelligence to suggest the investors the most profitable options on the market. They often replace or complement the traditional financial advisors that manage investment portfolios.

People that can’t afford personal financial advisors, those who invest using fewer resources are the target audience for such software.

This software is predominantly popular in the US. Business Insider reported about 200 Robo-advisor companies in the US compared to 20 companies in Europe/China.

Globalization changed these numbers a little bit, but still, the Robo-advisor center is still in the US.

Micro-investment Instruments

The stock market has always been a rich persons’ environment, But what about those who are able to invest little amounts and get tremendous profits? That market is now being covered by micro-investment platforms.

Some brokers now allow investing small amounts of money without any commission whatsoever. Their target audience is millennials, and the main goal is to present the investment as a simply accessible endeavor.

Financial Times report that the main goal for the industry is to make investment a habit that grows with Millenials.

Investment Tools and Portfolio Management Systems

Software category ‘Investment Tools” includes different types of services that offer investors extra information through digital tools. Usually, this type of information arrives from either from research, or access to advice.

For instance, there are services that help with assessing digital brokers on the market or receiving research reports a user needs in a newsletter.

The category is much wider, really, and the new ideas to ease up online investments keep appearing on the market.

As for portfolio management systems, investors and their financial advisors need their portfolios to be kept on a single platform. Such a unification software finds huge demand and is proudly one of the segments of the modern wealthtech.


We’ve listed just a few types of software of a single industry dozen of which contribute to the modern world of fintech. Is wealthtech promising? Without a doubt. Also, it is very competitive field. 

You have to wisely select the directions of your future project, consultants, and contractors for its implementation.

At the same time, traditional banks also want to stay relevant. The ways they achieve that are described in the following section.

McKinsey’s Report on Bank Imperatives in New Environment

If there is a more conservative business sector that is unwilling to change, we are unaware of it: banking is and always has been reluctant to disruption by technology.

There has always some sort of consumer inertial in financial services, as many people were fine with not changing their financial services providers. The market was well-developed and established brands kept on gaining consumer population, seldom selling some side services.

However, the environment has changed drastically lately. Silicon Valley is coming. Hundreds and thousands of start-ups, tons of brains, and money involved in developing alternatives to imperfect traditional banking. 

Traditional banking institutions have to find ways to stay relevant in the digital environment. This is especially true in times of COVID-19 pandemics when physical banks have suffered another blow. 

McKinsey consulting firm analytics offer to stick to these six “imperatives” to keep up with the competition.



Acting upon Data-Driven Insights

Using data-driven insights and analytics holistically across the bank is a must. When Facebook or Google enter the fintech game, they literally have all the information in the world about their customers: they leave it voluntarily in social networks and allow studying their behavior to search engine giants.

At the same time, traditional banks often possess even bigger amounts of relevant data and they’d be fools not to use it to create an amazing customer experience.

Banks have to build a comprehensive data ecosystem to access customer data from within and beyond the bank, create a full five of customer activities, and organize analytics and infrastructure to master scientific decision-making.

Clients bases are huge, and using this data is critical to banks’ future success.

Creating Top-Notch Integrated Customer Experience

The physical distribution of bank services is pretty much over. Modern customers expect the real-time cross-channel distribution of services from their bank.

Banks, in turn, have to recognize these expectations are set by non-banking financial services and act accordingly.

Their only option at the moment is creating an omnichannel distribution of their services so the customers would enjoy their stay in the bank no less than they enjoy financial startup services.

Digitize and Streamline All the Processes

Digitizing banking operations is an absolute must. Manual processing of credit score shouldn’t stay existent, for instance. Every process digitized, simplified and streamlined serves as an additional bonus.


Working on Digital marketing as Effective as E-Commerce Giants

As banks compete for the customer, they have to gain where they lagged before their opponents all the time6 in digital marketing. 

Big data and analytics allowed digital marketing to thrive for the bank’s direct competitors. digital media, exploring and acting upon customer lifecycle under strict management, providing all types of marketing operations is vital for banks’ success.

However, building those capabilities and recruiting/nurturing digital marketing talent requires lots of time and money.

Embrace Modern Technologies: from Agile to Cloud

CIO - Chief Information Officers should become more of “Intelligence” officers, and their responsibilities’ circle widens. 

“Mobile” is now not a revolutionary technology, it is an obligatory territory for improvement. Banks have traditionally mastered security. They should pay even more attention to this sector. 

Also, a flexible IT structure within the organizations is a must - every platform now is a cloud.

The recommended methodology for delivering new (and not so new) projects is now agile.

Banks have a very challenging road ahead in building next-gen technology capabilities.

Re-Organize Legal Issues

With lots of legal procedures existing, banks should be responsible for obliging all compliances required not just about their activities but also with keeping all the customer data secure.

Banks traditionally have difficulties with going digital.

There are countless ways to follow these initiatives. Some of them should be developed in separate digital bank departments, sometimes laboratories are the best options, there are cases when banks use VC-like investments to experiment with the new technologies.


The main takeaways from this long read are the following: fintech is here, fintech attracts a lot of attention and money.

Wealthech is just one of many opportunities to try yourself on the market. In the future, we will observe several more. Stay tuned.

Also, we never forget about traditional banks, and we’re ready to admit that they are behind their new competitors digitally. However, there are ways to keep up and we highlighted them.

“VEB Technologies” usually serves as an independent contractor. We got the competencies to fulfill pretty much any request from our customers in the fintech domain: from a mobile banking app to complex blockchain-based projects. Contact us to receive a free quote.


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