Embedded wealth management – the next big trend to look out for?

Anders Norlin has worked with numerous entrepreneurs and management teams in ambitious tech companies, primarily within startup/scaleup B2B to help companies develop and grow. The last couple of years, he’s been very active in the fintech industry. For example he was a part of building Findec – a fintech community - from scratch that’s played a key role in developing the Swedish fintech ecosystem. According to Anders, there’s a lot of exciting things going on at the moment within the fintech industry.

– Innovative financial services have completely exploded over the past few years, especially in the Stockholm area. When it comes to green fintech in particular, Sweden possesses many outstanding companies that are getting international attention, he says.

We’ve only just seen the beginning of the fintech explosion in Sweden, if we ask Anders.

– I think it’s about to peak very soon, especially due to the fact that it’s become much easier for non-financial providers to build financial tools and services within their existing platforms and organisations, a phenomenon we know as embedded finance.

The next big trend in wealth management

As a matter of fact, it’s never been easier for non-financial companies to offer financial services than it is today, Anders states. He continues, but when it comes to embedded finance, we’ve barely scratched the surface of what we can achieve.

– In the future, I’m sure that we’ll see this phenomenon in wealth management. I think embedded wealth management services have a huge potential and will offer many new possibilities.

When asked what he thinks will be the driving force behind the development of financial services in the future, Anders has a clear answer. Services that are easy to learn and implement, so called plug and play-solutions will be the most successful.

– User-friendliness for both clients and individual users, as well as tailored and personalized solutions will also become even more important in the future. We’re already seeing more and more players using the benefits of data and automation as a way to achieve this.

In addition, Anders sees another interesting trend in the wealth management business, where managers act as wealth coaches rather than advisors.

– The modern wealth manager will need to get to know their clients personally in order to suggest the right solutions tailored to the clients needs and coach them in their investing. This means they will need efficient digital tools that will allow them to spend less time on administration and more time on finding the most relevant investment opportunities.

What will impact financial services in the future?

Anders is especially interested in a trend he likes to call the “spotification” of financial services, where users receive financial advice and suggestions based on their previous activity – much like getting new song recommendations based on your music listening on Spotify.

– We’re seeing many subscription-based business models, for example software-as-a-service companies. This is highly likely to influence the fintech industry in the near future since consumers nowadays expect a high level of flexibility in every service they use.

Effective digital tools are crucial

With the ongoing transformation and digitization within the financial industry, there’s a larger need for handling information in a secure and reliable way. There’s also an increasing amount of rules and guidelines that financial service providers, such as wealth managers, need to handle. Today, consumers take for granted that all financial service providers follow the rules and regulations – it’s a hygiene factor. Those who neglect it won’t be in the game for long, Anders says.

– What’s more important is a high level of transparency and that companies take action when legal issues arise. It’s crucial to own up to your mistakes and not put the blame on someone else.

To handle the complexity, simple and effective digital tools within wealth management will be crucial, Andreas says.

– It will be difficult to manage rules and regulations without the proper digital tools. The most important thing to remember is that it’s happening and it’s happening now. Wealth managers cannot wait to learn digital tools, they need to act now.