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FinTech Innovation

Book Description

A survival guide for the FinTech era of banking

FinTech Innovation examines the rise of financial technology and its growing impact on the global banking industry. Wealth managers are standing at the epicenter of a tectonic shift, as the balance of power between offering and demand undergoes a dramatic upheaval. Regulators are pushing toward a 'constrained offering' norm while private clients and independent advisors demand a more proactive role; practitioners need examine this banking evolution in detail to understand the mechanisms at work. This book presents analysis of the current shift and offers clear insight into what happens when established economic interests collide with social transformation. Business models are changing in profound ways, and the impact reaches further than many expect; the democratization of banking is revolutionizing the wealth management industry toward more efficient and client-centric advisory processes, and keeping pace with these changes has become a survival skill for financial advisors around the world.

Social media, big data analytics and digital technology are disrupting the banking industry, which many have taken for granted as set in stone. This book shatters that assumption by illustrating the massive changes already underway, and provides thought leader insight into the changes yet to come.

  • Examine the depth and breadth of financial technology
  • Learn how regulations are driving changing business models
  • Discover why investors may become the price-makers
  • Understand the forces at work behind the rise of FinTech

Information asymmetry has dominated the banking industry for centuries, keeping the bank/investor liability neatly aligned—but this is changing, and understanding and preparing for the repercussions must be a top priority for wealth managers everywhere. Financial Innovation shows you where the bar is being re-set and gives you the insight you need to keep up.

Table of Contents

  1. Cover
  2. Series Page
  3. Title Page
  4. Copyright
  5. Dedication
  6. Preface
    1. Organization of the Book
  7. Acknowledgments
  8. About the Author
  9. Part One: Personalize Personal Finance
    1. Chapter 1: The Theory of Innovation: From Robo-Advisors to Goal Based Investing and Gamification
      1. 1.1 Introduction
      2. 1.2 A Vibrant FinTech Ecosystem
      3. 1.3 Some Definitions, Ladies and Gentlemen
      4. 1.4 Personalization is King
      5. 1.5 The Theory of Innovation
      6. 1.6 My Robo-Advisor is an iPod
      7. 1.7 What Incumbents should Consider when Thinking about FinTech Innovation
      8. 1.8 Conclusions
  10. Part Two: Automated Long-Term Investing Means Robo-Technology
    1. Chapter 2: Robo-Advisors: Neither Robots Nor Advisors
      1. 2.1 Introduction
      2. 2.2 What is a Robo-Advisor?
      3. 2.3 Automated Digital Businesses for Underserved Markets
      4. 2.4 Passive Investment Management with ETFs
      5. 2.5 Algorithms of Automated Portfolio Rebalancing
      6. 2.6 Personalized Decision-Making, Individual Goals, and Behaviour
      7. 2.7 Single Minded Businesses
      8. 2.8 Principles of Tax-Loss Harvesting
      9. 2.9 Conclusions
    2. Chapter 3: The Transformation of the Supply-Side
      1. 3.1 Introduction
      2. 3.2 The Investment Management Supply-Demand Chain
      3. 3.3 How Intermediaries make Money
      4. 3.4 Issuers of Direct Claims (Debt Owners)
      5. 3.5 The Institutionalization of the Private Banking Relationship
      6. 3.6 The Digital Financial Advisor
      7. 3.7 Asset Management is being Disintermediated
      8. 3.8 ETF Providers and the Pyrrhic Victory
      9. 3.9 Vertically Integrated Solutions Challenge Traditional Platforms
      10. 3.10 Conclusions
    3. Chapter 4: Social and Technology Mega Trends Shape a New Family of Taxable Investors
      1. 4.1 Introduction
      2. 4.2 Generational Shift (X, Y, Z, and HENRYs)
      3. 4.3 About Transparency, Simplicity, and Trust
      4. 4.4 The Cognitive ERA
      5. 4.5 Conclusions
    4. Chapter 5: The Industry's Dilemma and the Future of Digital Advice
      1. 5.1 Introduction
      2. 5.2 Wealth Management Firms: Go Digital or Die
      3. 5.3 Asset Management Firms: Less Passive, More Active
      4. 5.4 Robo-Platforms: Less Transactions, More Portfolios
      5. 5.5 Digital-Advisors: Empowered Customization
      6. 5.6 Robo-Advisors: Be Human, be Virtual, take care of Retirement
      7. 5.7 Conclusions: Clients take Centre Stage, at Last
  11. Part Three: Goal Based Investing is the Spirit of the Industry
    1. Chapter 6: The Principles of Goal Based Investing: Personalize the Investment Experience
      1. 6.1 Introduction
      2. 6.2 Foundations of Goal Based Investing
      3. 6.3 About Personal Needs, Goals, and Risks
      4. 6.4 Goal Based Investing Process
      5. 6.5 What Changes in Portfolio Modelling
      6. 6.6 Personal Values
      7. 6.7 Goal Elicitation
      8. 6.8 Goal Priority
      9. 6.9 Time Horizons
      10. 6.10 Risk Tolerance
      11. 6.11 Reporting Goal-Centric Performance
      12. 6.12 Conclusions
    2. Chapter 7: The Investment Journey: From Model Asset Allocations to Goal Based Operational Portfolios
      1. 7.1 Introduction
      2. 7.2 Main Traits of Modern Portfolio Theory
      3. 7.3 Main Traits of Black-Litterman
      4. 7.4 Mean-Variance and Mental Accounts
      5. 7.5 Main Traits of Probabilistic Scenario Optimization
    3. Chapter 8: Goal Based Investing and Gamification
      1. 8.1 Introduction
      2. 8.2 Principles of Gamification
      3. 8.3 Gamification of Wealth Management
      4. 8.4 The Mechanics of Games
      5. 8.5 Conclusions
  12. Concluding Remarks
  13. Bibliography
  14. Index
  15. End User License Agreement