New technologies such as the much-hyped ChatGPT and social media platforms like TikTok promise to deliver financial advice in new and useful ways to younger generations, but fintech must educate along the way.
This was the key takeaway from a panel at the Innovate Finance Global Summit (IFGS) 2023 yesterday, which discussed what will come next for wealthtech.
From robo-investing to ChatGPT and TikTok, investors, especially younger ones, are increasingly learning how to manage their money through these technologies and platforms.
But just because they are bleeding-edge does not mean they are problem-free. As Alex Cowan-Sanluis, chief executive officer and co-founder of Platform One, pointed out, using the example of robo-investing: “What if this [technology] gives you the wrong advice? Who is liable?”
The panel suggested that education is needed to inform users about both the potential and limitations of these services, technologies and platforms. Of course, fintech can also play a role here.
Matt Freeguard, investment products manager at Shares, argued that new technologies are filling gaps in education around financial advice and wealth management, noting: “One of the barriers to entry is the lack of education and understanding. Users need to be educated. ChatGPT can do this.”
Fintechs are also increasing awareness of wealth management. Anyone who has taken a ride on the London Underground will have seen many advertisements telling them how to invest their money.
On this success, Mary Agbesanwa, fintech growth lead at Seccl, said: “Fintechs are improving access to investing.”
These fintechs do face a challenged, however. Agbesanwa said they need to work on keeping their customers engaged, particularly when their investments dip.
Agbesanwa continued: “Influencers have shown us there is a consumer demand on TikTok and other social media apps that people want to invest. We need to keep them engaged.”
Another benefit fintechs have brought to the table is personalised finance, which helps to get more people, from a more diverse background, interested in investing.
Agbesanwa said: “Personalised finance works, whether it with women or other underserved markets.”
Another change in the future of wealth management will be where investors go to get their information, the panel predicted.
Freeguard said: “This is increasingly found with influencers or YouTubers.”
Cowan-Sanluis added: “A big move in the next generation will be into the asset classes that are most visible on social media.”
This trend can be seen in Elon Musk’s Twitter recently partnering with eToro to enable its users to see real-time prices for a wider range of stocks, crypto and other assets.
Chris Riedy, vice president of global sales and marketing at Twitter, said of the news last week: “We believe real change starts with conversation, and finance and investing is a growing part of that conversation.
“We are pleased to partner with eToro to provide Twitter users with additional market insights and greater access to investment capabilities. Twitter will continue to invest in growing the #FinTwitter community.”