Natalie Monko Lead Project Manager

    What is WealthTech: Market Overview & Best Practices to Follow

    According to CB Insights, wealthtech experienced a funding boom in Q1’21 with $5.6B raised, which is more than 2020’s total year-end wealth tech funding of $5.2B. What is wealthtech, what is the background behind this boom, and what is to be expected in this field? These are the questions that we are going to talk about in this article.

    For 12+ years already, Surf has been engaged in mobile development and the financial sector and fintech have always been and remain our focus industries. Our portfolio covers various projects from mobile banks, a concept of investing app to a cryptocurrency trading app. We have always been attentive to the situation in the market as creating flagship apps requires deep knowledge of the business value chain, user needs and expectations, and game-changing trends in the industry.

    What is wealthtech

    A good way to start acquainting with the wealthtech sector is to give clear definitions to the concepts under review.

    To start with we’ll give a definition to wealth management in general which is an investment advisory service provided by financial advisors to their affluent clients to solve or enhance their financial situation. Such services cover tax planning, wealth protection, estate planning, succession planning, and family governance, wealth structuring and planning. The key goal of advisors is to assist their clients in growing, preserving and protecting their wealth.

    Wealthtech’s definition covers any digital solutions that are designed to facilitate the processes of wealth management. Along with digital payments, regulatory technology (regtech), insurance technology (insurtech), and others, wealthtech is one of the fintech industries.

     We have already talked about various types of financial software. But wealthtech has been attracting special attention lately and not without a reason.

    Wealth management market overview

    Looking back in wealth management industry history, we can say that one of the first algorithmically driven investment platforms, Financial Engines, was created in 1996 and can be considered the first robo-advisor. Since then, the wealth management industry has already made a relatively long way towards digitalization. Not so fast a way though, as in 2007-2008, the sector was heavily impacted by the Global Financial Crisis that resulted in many investors’ portfolio value dropping by as much as 30% and needed a significant period to recover.

    Nowadays, the necessity for the investment and wealth management

    to continue actively embracing new technology-driven approaches and tools is obvious, especially at the background of growing start-ups’ presence and pressing competition in various financial products and types of services: payments, lending, banking, and such. 

    One more factor that cannot be ignored by the wealth management market players is the Great Wealth Transfer which is underway now. During the next 20 to 30 years, Baby Boomers, who represent the richest generation in the history of America, will transfer their $30 trillion to their children, who belong to more tech-savvy Generation X and Millennials. And these generations’ preferences and needs differ in terms of using digital tools. 

    So it’s high time for the industry to get acquainted with the younger generation and to find a way to meet their expectations.

    statistics by generation

    Another factor hugely affecting wealth management is COVID-19 pandemic. The new reality has caused many questions about the wealth managers preparedness to shift to interaction with their clients in digital channels. Under the circumstances, wealth managers need not only to take short-term measures as a quick time to respond, but to think of their long-term strategies for engaging better tech capabilities.

    Key market players

    The current situation presents for advisors both new chances and new challenges. From this point of view embracing the wealthtech solutions looks like the most reliable way forward.

    According to KPMG, in Q12021 the global venture capital investments exceeded $52 billion (compared to the annual record of $54 billion in 2018). And wealthtech companies are among the largest Venture Capital (VC) rounds. And namely, US-based Robinhood ($3.4 billion), a startup that offers commission-free stock trading and investment tools, and Germany-based Trade Republic ($900 million), a mobile-only and commission-free broker that allows easy investing.

    The range of ideas and services presented in the wealthtech sector is wide and the offers cover all kinds of needs, both in terms of advanced technology solutions for professionals specialized in offering financial advice, and for end-users.

    The wealthtech companies can be differentiated by the possibilities they offer, including but not limited to:

    • various digital investment  tools designed to plan investments, manage portfolios, set goals, and so on.;
    • digital trading platforms where users can trade in real-time, irrespective of their background and qualification;
    • social trading platforms — networks for traders, where users can exchange their cases and opinions;
    • compliance tools — software that automates or facilitates activities related to ensuring regulatory compliance;
    • roboadvisors — digital platforms that offer automated planning services with little to no human supervision;
    • robo-retirement — solutions designed to manage retirement savings. 
    • digital wallets   software designed to analyze and manage income sources and spending;
    • algorithmic trading — a method of executing orders or performing trades based on a predefined set of instructions at a high speed.

    Every year, the WEALTHTECH 100 list is composed by a panel of industry experts and analysts. The list presents the solution providers of the next-generation wealthtech companies which are most likely to change the industry. The list updated for 2021 includes among others:

    3rd Eyes Analytics  a Swiss wealthtech and insurtech company that offers financial institutions realistic and scenario-based asset-liability management methods aimed to deliver goal-based investing, integrating sustainable investing beyond regulatory requirements.

    Mobile suit

    Adviscent — a company that specializes in innovative information management solutions for advisory processes.

    apple display

    AlphaSwap — an investment technology platform, bundling its analyst community’s best stock ideas into Data-as-a-Service.

    Alphswap intro screen

    The Financial Technology Report presents Top 100 Financial Technology Companies resulting from their thorough evaluation process. And in 2021, along with Square, Stripe, Finastra, the company of the Wealth Management category occupies the 5-th position: Personal Capital offers state-of-the-art tools and technology for investors in the field of wealth and cash management and is used by over 2.5 million customers. 

    Personal Capital app

    4 trends in wealthtech

    Based on the changes that the wealth management market undergoes and on the evolving clients’ habits and expectations, we have defined 4 key trends in wealthtech that refer to the client-centric approach, and are focused on gaining better client engagement and loyalty.

    High personalization

    Younger generations are willing to get tailored experience and ready to share their data to get it. Being active users of services provided by technology giants such as Amazon, and similar,  they are used to the content and functionality being delivered to them according to their specific needs without any special efforts on their part. And wealth managers are among those providers to be trusted.

    personal data statistics

    Wealth management service providers, in turn, search for appropriate solutions to make the collected data work and generate value by making use of the capabilities offered by Big Data analytics, artificial intelligence, and machine learning algorithms. 

    Seamless UX 

    User experience has always been a point of focus for financial technologies as, on the one hand, users in this sector expect all the operations to be simple and easily performed, irrespective of their deep technology knowledge, and, on the other hand, the UX shall exclude any ambiguous solutions to avoid eventual errors.

    As an example, in 2017, Surf started the development of a cryptocurrency trading app. At the time, the UI and UX of the cryptocurrency trading platforms were far from being perfect, and our team invested much effort to get the edge over the competitors due to thorough UX research that took approximately 2 months. As a result, the app combined functionality that matches both enthusiasts and professional traders. 

    cryptocurrency trading app

    The COVID-19 pandemic forced people to accelerate shifting to online services. And wealth management services are not an exclusion. Even after the pandemic is over, people will still prefer interacting with advisors through digital channels and expect the experience to be convenient, seamless, and easy.

    The good user experience becomes an increasing priority. And more so, as self-service gains in popularity. 

    Within the wealth management industry, the personal interaction between clients and advisors has always been the focus activity. And it remains, but a hybrid model of one-to-one and digital interaction is evolving as many clients choose faster and more convenient “anytime anywhere” options. The self-service capabilities shall match users’ lifestyle and cover their needs in managing investments — and here, the appropriately designed UX plays a major role in winning clients’ trust.


    From the point of view of the cybersecurity maturity, the wealth management industry has not been so strong until recently, as compared to other financial services sectors. According to a KPMG report, only 39% of asset management CEOs who took part in the survey were completely ready for cyber attacks challenges in 2017.

    Now, the situation has drastically changed as the wealth managers and advisors use digital channels on a broader scale and manage growing amounts of confidential and sensitive data from their clients. Cybercrimes are growing more sophisticated as the tech innovations themselves, and the wealth managers invest more effort in meeting cybersecurity requirements and managing security risks.

    In terms of technology the security risks can be mitigated through different options:

    • cloud-based delivery model to make the controls more consistent;
    • AI and machine learning to detect potential threats;
    • biometric solutions as an additional layer of security and two-factor authentication.

    Wealthtech ecosystem 

    With the wealthtech ecosystem we mean collaboration between technological startups and other institutions, companies, and persons involved in deploying new solutions within the wealth management industry. The trend is to develop coordinated collaboration, and this can be confirmed by numerous mergers such as JP Morgan acquiring Nutmeg or Finantix and Tegra118 merging with InvestCloud. 

    The trend promises benefits for all participants:

    • startups with their disrupting ideas get access to funding and new markets;
    • wealth managers/corporates adopting new technology solutions bring new capabilities to their offerings and engage more clients, and extending their reach;
    • investors gain benefits from investing in startups with good long-term prospects;
    • the community benefits from the trend to sustainable investing, as Millennials prefer to be aware of what the return on their investment costs to people and the planet and want their investments to be used for something meaningful and not just for gaining profits.


    Summing up mentioned above, we can say that currently market witnesses the wealth management sector changes and the evolving wealthtech contributes a lot to the approach to interaction with clients, which is growing more client-centric and personalized, as well as to adding value to the offerings made by wealth managements and advisors due to collaboration within the ecosystem, and not to forget improved cybersecurity possibilities along with compliance to regulatory standards and requirements.

    To get deeper into the subject, we invite you to read how to create an investing app to find out anything you need to know about the process including information about key features, development roadmap, and costs.
    If you have a new app idea and need professional hands and fintech expertise to implement it, contact Surf at [email protected].