The Roubini ThoughtLab report on “Wealth and Asset Management 2022: The Path to Digital Leadership” is a rich source of insights and statistics of the four stages of the digital maturity spectrum, from more than 1500 investment providers and 40+ interviews with senior executives from financial institutions, consultancies, and technology firms.
The 9 sectors that are analyzed have naturally very different digital maturity levels but nonetheless, digitalization is unstoppable. Since there is no canned solution on how to use technology to tap into new businesses, new markets, increased profitability, or market share, or productivity; the recipes vary. Financial institutions involved in WAM (mutual funds, private banks, alternative providers, universal banks, brokers etc.) don’t have access to low cost of capital and can’t afford endless experimentation even though the cost of experimentation failure has dropped substantially.
The WAM ecosystem sits well below Amazon which has access to the lowest cost of capital these days and can now borrow money for less than the cost of what China can borrow money. As a result, Amazon can experiment like no other company. Any amount of failure for them is a speed bump and doesn’t even affect their stock price or their customer turnover.
From the 60 page Roubini ThoughtLab report on Digital WAM, one transformation story captured my interest, that is real and alive: Pictet Asset Management! A traditional brand name that stereotypical thinking could dismiss in terms of their aggressiveness on the digital maturity spectrum.
Pictet is using technology to tap into three new businesses:
- A geographic expansion into North America to grow their strong global thematic investment offer,
- A clientele expansion to gain market share in institutions that are underinvested in thematic strategies,
- A clientele expansion to gain market share with the millennials, who care for socially responsible investing options.
This is no window dressing. Pictet is taking one of its core strengths and leveraging it with technology to improve revenues, profits, productivity, and market share. Pictet has developed 13 thematic strategies: Biotech, Clean Energy, Digital, Global Environmental Opportunities, Global Megatrend Selection, Global Thematic Opportunities, Health, Nutrition, Premium Brands, Robotics, Security, Timber and Water. They have launched Mega, a Pictet micro-site that aggregates content around megatrends (infographics, videos, blogs etc), uses social media towards increasing Mega-Pictet’s ranking in the megatrends and thematic investing space. Right now Pictet is reporting 10,000 followers and 8,000 monthly views. They already see that this approach has helped in promoting a new robotics fund and in reaching out to find a partner distributor in the US. Their also adopting elements of the innovative research process that ArkInvest has instituted which includes crowdsourcing intelligence from scientists, and academics as advisors and or theme developers.
Thanks to Anthony Christodoulou at Robo-Investing, official distributor of the Roubini thought lab report, who brought my attention to the report as soon it was live.
All figures are from the Roubini thought lab report.
Efi Pylarinou is a Fintech thought-leader, consultant and investor.
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