Study shows 68% of wealth management customers in the post-COVID world are expecting a fully digital onboarding experience. Wealth management firms are accelerating investments in front-office technology to encourage growth while also creating efficiencies and meeting changing customer demands. While projections indicate a full economic recovery will not occur until 2022, wealth management firms expect to start growing their IT investments throughout 2021 in preparation for the rebound. The crisis has led some firms to adopt new technologies (digital onboarding, hybrid advice, cloud) and cast away antiquated manual practices (traditional onboarding, legacy platforms) that would have taken many years to change. Although much uncertainty (due to COVID) remains, it is imperative that companies invest in the appropriate tech solutions so they can keep pace or “risk being eclipsed by competitors.
RBC Bank adopts open arch wealth platform with APIs and micro-services connectivity to 3rd-party apps
RBC Wealth Management-U.S. and fintech Broadridge Financial Solutions announced that RBCWM will utilize the Broadridge Wealth Management Platform to power its growing U.S. business. The Broadridge Wealth Management Platform is open architecture powered by state-of-the-art APIs and micro-services that facilitate seamless connectivity to a client’s proprietary and third-party applications. The platform includes a modernized advisor desktop and customizable tool set. Key advisory features include performance reporting, managed accounts support and sleeve accounting; multi-market order management and trade routing; and full back-office functionality that handles multi-currency, global clearance and settlement, asset servicing, and integrated workflow across the entire enterprise to accelerate client on-boarding and other key functions.
Robinhood is eyeing expansion beyond trading to emerge as a money super-app
Robinhood has become synonymous with the boom in trading by smaller-pocketed and novice investors. Such investors are getting their first chance to grow their wealth, after years of falling further behind stock-owning households, but they also have been criticized for making too many risky trades with their newfound app. Shares of Robinhood Markets traded for the first time on the Nasda, following the highly anticipated initial offering by the company that’s drawn a new generation of investors into the market and forced the industry to stop charging fees for trading. Robinhood wants to be the only app that people use on their phones for money. That covers everything from depositing paychecks to paying bills to splitting payments with friends. The company is also interested in Bitcoin and other cryptocurrencies in the long-term strategy. Over time, the company wants to be the single money app, the most trusted and most culturally relevant money app worldwide: a paycheck direct deposit, emergency funds, bill pay, day-to-day spending, all types of investing ranging from more discretionary investing to long-term retirement savings as well.
Non-profit Consumer Reports warns digital banks offer lots of benefits but fall short on customer service
Digital banks offer lots of benefits but fall short on customer service. Many of these online banks have almost no customer service. That includes a person you can contact to resolve any issue you have. Instead, most offer only a chatbox or email, and there’s no guarantee that anyone will respond. That means consumers are often unable to get an error or dispute fixed—or even access their own money. When consumers open up bank accounts, they naturally expect to be able to quickly get access to their own money when they need it. Without fast redress by the bank, customers could very likely be unable to pay for essential needs like food, housing, and transportation, and even face dire conditions like hunger and eviction. Online banks say customer service is important to them and they’re trying to beef up those operations, including increased access to human agents. Consumer Reports, formerly Consumers Union, is an American nonprofit consumer organization dedicated to independent product testing, investigative journalism, consumer-oriented research, public education, and consumer advocacy.
JP Morgan’s UK digital bank project to offer more wealth-management features than the fintechs
The Chase UK project has been shrouded in mystery. But at last, JP Morgan Chase is ready to unveil its debut, which will be branded as Chase UK. The new bank is now set for launch in September, having entered the final stages of its employee pilot and is preparing a “big bang” marketing splash. Chase’s launch is a big moment for the UK banking scene and in particular, for fintechs like Monzo and Starling, who are being taken on at their own (digital) game. Chase UK arguably offers a triple threat. It’s planning to offer more wealth-management features than the fintechs, it’ll boast a modern tech stack to outpace the incumbents and it’s supported by the colossal balance sheet of America’s largest bank. A multi-product, digital-first strategy that doesn’t rely any fintechs, is a very serious proposition and completely different from incumbents just doing offshoot brands. What’s more, Chase isn’t just going to fight banks on the retail side. They’re planning to go after the SME market too, by eventually shipping a business product. The new digital bank’s card is a dark blue, featuring the Chase logo on the right, and the user’s name is printed in silver on the bottom. There is no number printed on the card itself, which is contactless and metallic. The app itself mirrors those developed by the first neobanks. It has a slick, clean interface and several key tabs located on the bottom. That includes a transaction ledger and a ‘Pay’ tab which allows users to easily send money to Chase contacts or recent ‘payees.’ Notifications pop up after each payment and online shoppers can access their card number via the app. As promised, Chase will initially only operate as a current account, allowing users to spend and store deposits. JP Morgan has already said Chase UK has a strong product roadmap ahead, looking to add a full body of wealth management and lending services. Its acquisition of robo advisor Nutmeg speaks to this ambition. The acquisition also suggests Chase UK is going after an older, wealthier base than early neobanks, who will use Chase to store their salaries. Indeed, Nutmeg’s 140k users are broadly made up of middle-class professionals, with an appetite to borrow in large quantities. To lure this demographic, JP Morgan says it will offer users a “fast-to-access, personalised service around the clock”, delivered by a customer service hub. It’s hoping this will compensate for its branch-free approach. It’s also worth noting that, like Monzo, Chase will be a licenced bank that can store British deposits on its own balance sheet. JP Morgan’s entry into the UK marks its first international foray in the consumer space. It’s part of a strategy to aggressively grow its retail unit. With US regulators getting stricter on banking acquisitions, overseas expansion has become a necessary growth tool for banks like JP Morgan. JP Morgan’s expansion in the UK has also been tipped as a foothold for its entry into wider Europe. As a result, the US giant is clearly taking its assault on the UK seriously. JP Morgan has also invested in building an entirely separate cloud infrastructure for Chase, reportedly using 10X — the core banking tech provider. The question now is whether Chase can wrestle the market away from native giants like Barclays, as well as upstarts like Monzo and Starling. JP Morgan is also an outsider in the UK, which — coupled with user inertia — could play to local banks’ advantage. Nonetheless, Chase is not like any bank project seen, boasting an unrivalled budget, political will and modern technology.
BoA invests more in Paxos same day stock settlement DLT platform
Blockchain infrastructure platform Paxos has added Bank of America, Coinbase Ventures, Founders Fund and FTX to its recent $300 million Series D funding round. Bank of America joined the Paxos Settlement Service earlier this year. Paxos uses blockchain technology to achieve same-day settlement of stock trades. Paxos started providing infrastructure for PayPal’s crypto service last year, which has extended to PayPal’s Venmo payments app. Credit Suisse, fintech Revolut and Societe Generale are among other customers.
Fintech creates a VIX-like crypto volatility index 2.0 with USDC support for staking, as an incentive
Fintech platform COTI revamped the Crypto Volatility Index (CVI) to offer a set of new features including USDC support for staking. The gauge is designed to indicate the level of implied volatility in the crypto market through a decentralized index from crypto options prices. It is similar to the VIX volatility index, often called the fear index, on the S&P 500. Staking is fundamental to how the index works because users must be incentivized to make it work. With the enhancement, users can open USDC positions and stake CVI USDC through the index. the index initially supported trades and deposits in either ether or tether. Volatility tokens have also been introduced as part of CVI 2.0 to be used as a hedging tool by investors. The first such token is USDC-ETH, which can be traded on all Ethereum-based decentralized exchanges. CVI 2.0 also includes margin trading on the Polygon network, allowing users to access greater sums of capital.
State Street to incorporate digital assets alongside private clients’ other alt-investments
State Street is to offer crypto and digital asset fund administration services to its private fund clients. Working in partnership with software provider Lukka, State Street will offer collection, reconciliation, processing and reporting related to cryptocurrency and other digital assets. State Street will use Lukka’s middle and back office software to incorporate digital assets alongside private clients’ other alternative investments. This news is the latest sign of the incremental adoption of crypto assets among Wall Street’s vanguard, following on from State Street’s recent launch of a cryptocurrency division.
Standard Chartered and Northern Trust cryptocustody JV wins FCA approval
Zodia Custody, a digital asset joint venture operation between Standard Chartered and Northern Trust, has received regulatory approval from the Financial Conduct Authority. The registration means that Zodia Custody is now providing commercial services to clients as a cryptoasset business. Aimed at the institutional market, Zodia Custody will initally provide safekeeping for the most commonly traded crypto currencies – bitcoin and ethereum, followed by XRP, litecoin and bitcoin cash – which collectively account for around 80% of the total assets traded on the major crypto exchanges.
CES 2022 to debut new digital initiative for NFTs and crypto
The Consumer Technology Association announced a new initiative at CES that will exhibit and highlight non-fungible tokens (NFTs) and other blockchain-based technologies. The initiative will include digital asset exhibits, as well as talks that discuss the rise of non-fungible tokens (NFTs), initial coin offerings (ICOs), and other blockchain businesses and technologies. The digital asset exhibits and programming will be hosted at the Aria in Las Vegas, Nevada. Several industry leaders and innovators will lead the discussions surrounding the emerging technologies.