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“Digital transformation is much more a cultural challenge. And I believe that in the East, and many bigger emerging markets they just have an easier life of new tech. They have it easier just to scale, and also because of the socioeconomic drivers, because of the huge market and because of the high growth rate of the economy, they just grow into it.”

— Urs Bolt, Industry Thought Leader and Influencer

Urs Bolt is a Swiss WealthTech and RegTech expert with over 30 years experience of industry experience mainly in the areas of risk and regulation, wealth management, investment banking and banking technology business. Urs is regularly ranked as top influencer in WealthTech, FinTech, RegTech and Blockchain, and is an active speaker, panelist, moderator, interviewee, micro-blogger and author.

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This episode of Wealth Management Today is brought to you by Ezra Group Consulting. If your firm is evaluating new technology or looking to improve your current wealth platform, you need to contact Ezra Group. Don’t spend another day using technology that doesn’t offer an elegant user experience. Your advisors and clients deserve better and you can deliver it to them with the help of Ezra Group.

Topics Covered in this Episode

• WealthTech Platforms of the World
• “Platformification”
• Cultural Challenges of Digital Transformation
• Subdividing the Mass Affluent and the Ultra High Net Worth
• Will Asian Tech Win in the West?
• Super Apps and the Asian Payments Market

Companies & People Mentioned

• Acorns [41:40]
• Alibaba [09:36]
• Amazon [17:45]
• ANT Financial [27:44]
• Baidu [41:13]
• Betterment [05:53]
• BlackRock [21:58]
• Citigroup [24:00]
• Credit Suisse [28:13]
• Goldman Sachs [23:24]
• Google [34:56]
• Grab [09:52]
• JP Morgan [23:57]
• Julius Baer [28:16]
• LuFax [09:39]
• MoneyLion [41:54]
• N26 [30:33]
• Nutmeg [09:20]
• OFX [29:52]
• Onalytica Limited [01:50]
• PingAn [09:39]
• Revolut [33:29]
• Ripple [33:13]
• Skype [17:54]
• Stash [41:53]
• Tencent [09:36]
• TransferWise [18:00]
• Uber [10:17]
• UBS [12:02]
• Vanguard [21:58]
• WeBank [27:07]
• WeChat [09:37]
• Western Union [33:05]

Complete Episode Transcript:

Craig: Urs Bolt has become a leading influencer in both WealthTech and RegTech by providing useful insights and advice to financial services firms around the world. We spoke about the changes in global digital advice, the impact of super apps and who will win the race to become the world’s number one wealth management provider.

Craig: Welcome back everyone. I’m glad you’re here for another episode of the Wealth Management Today podcast. I’m your host, Craig Iskowitz, and I’m bringing you new ideas from people on the leading edge of technology and innovation in our industry. I run a consulting and research firm called Ezra Group and we help broker dealers, banks, asset managers and RIAs make better technology decisions and I’d like to remind you to hit the subscribe button so that you don’t miss any future episodes. Are you ready for this episode? Well, it’s starting right now.

WealthTech Platforms of the World

Craig: Welcome to this episode of Wealth Management Today and I’m happy to announce my guest today is or Urs Bolt, independent WealthTech advisor. Hey Urs.

Urs: Hi. Correct. Good to hear you.

Craig: Good to hear you as well. Thanks for being here. And you just said I should introduce you as an independent WealthTech advisor, but I’m going to go a little further. You’re a WealthTech and blockchain advisor, you’re a speaker, panelist and a moderator. You’re a startup coach and a mentor, and you’re a global top 50 influencer on social media.

Urs: Yeah, that’s what I just learned from Onalytica and others. I mean for about the last 12 months, I really realized the value I can bring to the community in the wealth space because that’s where I have many years’ experience. And I believe that’s something which out of Switzerland, where I’m from, which people always want to learn about, especially going to the East, in China many times. So this is my focus, in the cross section between technology and wealth management practice, but also going beyond as I will probably explain during the podcast.

Craig: Right, absolutely. And we’ve never met, so we’re meeting virtually now. We’ve interacted a lot online, lots of social media cross influencing.

Urs: Exactly. Yes. That’s amazing thing about Twitter because you get to know people and after a while you get the sense of each other. And of course you don’t know everything, but that’s what I feel. And I’ve made a lot of friends via Twitter in the last few years, at least more than on LinkedIn.

Craig: Oh yeah. Well it’s more conversational on Twitter. LinkedIn is more business like. So our topic today is WealthTech platforms of the world. And when you suggested that topic, I jumped right on it because one of the things I like to say when I introduce the podcast is it’s the world of WealthTech. So WealthTech platforms of the world is a perfect topic for this podcast.

Urs: That’s what I believe. I have quite good knowledge. You definitely know the market in the US much better, but because I’m listening to many people and meeting them, but I’m looking more towards the East and I think bringing the three major time zones together could be quite helpful for people who want to look beyond the domestic US market, or just Europe and people who want to learn more about what’s going on in Asia.

Craig: Yeah. So let’s start in Europe. So let’s talk about WealthTech in Europe. What’s your opinion in general about WealthTech platforms in Europe?

“Platformification”

Urs: In general, obviously WealthTech is following more the footpath of FinTech. FinTech obviously started with transactional payments, cross border payments, simple basic banking functions. When it comes to WealthTech, there is a wide range of different applications. You can come from the investment side, you can serve the incumbent client base and you can also serve the lower end of it, which comes along FinTech, which we see now with the big challenge banks offering simple investment solutions with funds and other things. And the question, what’s now going on with platformification, how, where will the dynamics play? What will shape the market in this sense and this belief that platformification will happen, but they can be directed and influenced by different drivers. So if you are in Europe obviously robo advisory started already 2011, 12, we’ve not made in the UK, we have some other platforms, but usually all these platforms, they need to bring in a big enough customer base. And the ones which we know from the States, Betterment, they already integrated into bigger asset bases which obviously shows they need scale. They need a scalable user and asset base. And that’s what we still miss in Europe. And some of them already went down this path. Most of them in Switzerland, and not to forget, we still have the biggest private wealth, accumulated wealth in Switzerland across the whole globe. But 25% of private development is actually costed them booked in Switzerland. This is massive for a country of just eight and a half million people. And there are many reasons for this, which we don’t want to touch today. But the fact is that most WealthTechs, especially in Switzerland, want through to B2C to serve incumbents or platforms which need the capability to visualize wealth management, which includes easier onboarding, which includes automating the process, the investment process, first risk profile in investment, process reporting, etc. And that works fairly well. But all of those, and there are some others like scalable in Germany, they grow much faster, but there are very few, which you can say, they seem to be on a good path. It’s very tough.

Craig: So let’s go back a second. You mentioned a word which I think I understand, but I wanted to get your definition. What do you mean by “platformification”?

Urs: So it means that you bring together different capabilities, services you can go along the life cycle of a client. You need to do the onboarding. Obviously you need KYC, you need to do AML checks, etc. You do the risk profiling, etc. And these two days within commonplace you have it all scattered in different tools and applications. So if you want to really serve someone from a purely digital point of view with a smart phone app, you need to integrate it all and it needs to go hand in hand. And that’s not how the incumbents, the traditional players, are set up, right? They have manual interfaces and I know that from the banks I’ve worked for how it is, some are better, some are less. And it’s still shocking how this industry is working and obviously not investing into proper work automation, which would also make lives of the people and employees easier rather than just cost cutting by outsourcing and handing over processes to other jurisdictions where they might be cheaper.

Craig: Do you want to talk about a few of the WealthTech platforms that you think have succeeded in this area?

Urs: So far it’s difficult to say because most of them are privately owned, right? So it’s not easy to know about the figures, but I guess there are some which are not sold out now, which are kind of B2B working together with banks.

Craig: Right, that’s the ones I’m talking about, the B2B ones.

Urs: The big platforms in Europe, to be honest, I’m just aware of scalable. I know Nutmeg, I know some others, but they still struggle with profitability. Right? So I believe where it really starts changing is in the East. So you see the big platforms from Alibaba, Tencent, WeChat, you have PingAn, LuFax, which is the biggest WealthTech in the world to say which focused very early to officer. That’s China. But then just last week, early last week, we heard that Grab, both a WealthTech provider or robo advisor, which is a term I don’t really like because there’s still people behind it, there’s nothing going just on its own. But the fact is that the platforms in the East are expanding their service range. So when you look at Grab, at their super app they offer today and compare that with Uber. Uber is really at a very early point.

Craig: You’re talking about Grab? The Grab app?

Urs: Yeah, exactly. So Grab is obviously where you can order a cab, like Uber, and they’re out of Singapore.

Craig: And Grab is the number one ride hailing app in Southeast Asia.

Urs: Exactly. Yeah. So they have millions, about 100 million users on the platform now. Now that makes obviously most private bank could laugh about the volume they might bring in terms of single investor, right? But if you start thinking beyond what’s going on in 5, 10 years, then this wealth accumulation continues and it goes further down to the middle class, then suddenly these people are very much used to using the apps and having totally different communication channels. That makes me then wonder how as a traditional player do you actually want to serve these markets? So then that’s the platform part of it and it’s already clear that you integrate such services by buying the capability. Either by buying a whole firm or you build the teams by themselves. Usually in China they build by themselves, right? They might have some experts, but they do it themselves. Grab decided to buy into an existing service provider WealthTech platform, and I think Europe is still lacking on that in a way. Some projects like the one at UBS, I think it was called Smart Wealth or something in the UK was closed down or was sold, the one in States as well I believe also had quite a lot of difficulty. So a big challenge is not the technology I believe it’s also the culture.

Craig: Why do you say that? How are you dividing up the cultures of the world, are you saying Europe is one culture and Asia is another culture? Are you subdividing to smaller transformation?

The Cultural Challenges of Digital Transformation

Urs: Right. That’s a challenge. Digital transformation is a much more cultural challenge. And I believe that in the East, the far East, whole Asia included, some and many bigger emerging markets they just have an easier life of new tech, because they don’t know what we had before. They just grew up with phones, smart phones and it’s the most normal thing for them. And I mean even programs developers in China, some they just do it on their smart phones. I don’t know how you can do it, but it wouldn’t be handy for me. People can work in ways, which the two of us didn’t grow up with. I still like the keyboard in front of me, which I can use my 10 finger system. So they have it easier to scale. Also because of the socioeconomic drivers, because of the huge market and because of the high growth rate of the economy, they just grow into it. Whereas in the Western world, in the rich countries, we are more on a conservative basis. We defend what we earned and we basically build and continue on a very big asset base already, which will grow even more in the coming decades. And that’s a challenge. And the challenge is obviously also that we already have several generations, which we served in a one to one relationship in wealth management, private banking. And now the question is how do you integrate to digital capabilities to serve your clients better, meaning standard services or full class. You don’t really need people for this or you automate that. And on the other hand you have more and more expectations in terms of different values. Your clients might be cross-generational which makes it very difficult. So the answer from a tech perspective would be, Okay, we just build a new use case around the people over 60 and we served them very specifically with an app and offer some products around it. That’s probably going to happen too. But then in the same family we have the youngsters, which are maybe early twenties, mid twenties and they have a totally different worldview which might collide with what we believe is best for us and how we grew rich when you are more than 60.

Craig: Let me jump in a second. You mentioned digital transformation is a cultural challenge. You touched a little bit on that. So can you talk about the differences? Obviously we understand that in other countries that were lagging economically, or lagging technologically for many decades that turns into an advantage for them since they can leapfrog over the old tech, right to the new tech, when it’s available. Like in Africa, they leap right to mobile phones. They skipped all the crap in between. So where do you see that as being an advantage and how will that shake out when it comes to digital wealth?

Urs: Yeah, that’s an advantage in one way. But what I also see when traveling to many countries especially in Asia, but also Nigeria last year, is that they lack the depth and the breadth of the service, the capabilities and also the traditions, how to manage wealth, which has a longterm view. So that’s why there is probably a huge need also for established private banks and bankers, it’s their profession. That’s why obviously private banks out of Switzerland, in Asia are very successfully offering such services because there are many aspects playing into it. But we always talk about the upper 1% of wealth, and what I am really fascinated and interested in is to see how do you actually serve the growing middle class, which are not even touched because the incumbents with their processes, they can simply not serve them profitably. And that’s I think where the worlds will collide, right? They will come together, platforms will meet the traditional way of doing private banking. I think that’s something which we will be part of our conversations for the next 5 to 10 years at least.

Craig: Interesting. Another thing you mentioned was Europe is lagging. So do you think Europe lagging is temporary or is it something that they will eventually catch up, or they will never catch up and then US and Asian firms will come in and take over the wealth business?

Urs: I mean the lacking in a way from the tech platforms, don’t forget we don’t have an Amazon here. We had some place in Sweden which became then a US platform, I think it was Skype. Right? And it was something else. Can we have some in the FinTech space like TransferWise? So we have some unicorns, some more than a billion dollar worth of FinTechs and in the WealthTech space, I don’t really see that. So I think it it will merge in a way. So I think we need to understand that platforms are the new way of doing things and sharing resources and risks and maybe do the mundane tasks via shared platforms, use them as a service and not in the typical sense which many already do like business process outsourcing. So I’m talking from the private bank side, and I think that might then lead to a more platform-based also sharing intelligence maybe. And do you also know that in Europe it’s also more difficult in terms of data privacy? So it’s much more challenging, which is a trend across the world at Europe was first with a more stringent data privacy law, the General Data Protection Regulation, GDPR it’s called, and I think that also needs to be considered. But I think in the space, in wealth management I mean, this is a huge part of being a trusted advisor built on security security data.

Subdivisions of the Mass Affluent & High Net Worth

Craig: With the way the bigger firms are, we’ve been hearing for many, many years how the bigger tech players, all US-based and the Asian-based, are getting into FinTech or getting into wealth. And you mentioned the Chinese apps who all have wealth components and some of them were the biggest money market funds in the world, the Chinese super apps. And we’ve seen Amazon, slowly getting into finance and lending and checking and Apple is doing the same. So is Europe going to be squeezed from both sides where US tech players are coming in from the West and Asian tech players are coming from the East, and they’re going to just consume and divide up Europe?

Urs: I’m not so sure that the American players will take over. I think that they will come more from the side of the big asset management houses like BlackRock, Vanguard, etc, where they already have the capabilities. That might be one angle. On the other hand, I believe that the traditional European private banks and of course, especially the Swiss ones, they will still play their role. Very important role on the upper high net worth individual level. I think if you want to sustainably grow, you need to have strategies which will also look at the affluent or the upper affluent, high, lower, high net worth individuals space. And I think there need to be considerations. How do you want to collaborate with these up and coming platforms? Now if these platforms, if they are already there with a huge asset base, you might want to become an app on their platforms, right? That’s what happens on WeChat and on the apps in Asia, especially in China. And I believe that the way to go will be that the private banks and wealth managers have to think about how can they integrate into those platforms. So if Amazon would decide to go into the space, which I can not really imagine right now, I think they go more towards, the merchants, etc, and offer them funding, etc, with the help of Goldman Sachs, which became public a few couple of weeks ago. But let’s assume that then I would personally think about how can I be parked and what would be my value proposition on such a platform? And that way of thinking is quite rare. I don’t really hear many people within banks who really talk about this. I think even even UBS has the biggest, or maybe now the second biggest private development manager of JP Morgan or whoever it is or Citigroup. I think they cannot be a platform by themselves. They have to think about how to collaborate where they meet their prospective new clients.

Craig: So do you think there’s still an opportunity for the private, the large private wealth managers? So there you mentioned the high net worth, ultra high net worth space and talked about a new segment, the upper affluent space. So you’re subdividing client segments where it used to be mass affluent, then it goes to high net worth. You’re subdividing a little more in between the mass affluent and the high net worth and everyone seems to be moving up there. The robo firms are looking to move up as well, and then the larger private banks looking to move down, who will win in that area?

Urs: That really depends how you can play the cost. I mean, if you are able to automate and digitalize the processes and combine that with your strengths. So coming from an uncommon side means obviously you have the whole experience, the knowledge, tradition, the brand value. You can definitely play a big role in this. If you come more from the tech side and then you look at the East, it seems like they go into spaces where nobody in Europe even dares to go because I think that the European, whatever level of wealthy he is, he wouldn’t trust enough to go on such platforms. Right? So it will be always a side play. I think it will come together. I could even imagine that big techs would possibly buy into an established brand, which is well established in the high net worth individual and possibly even in the old tried and true space. I mean, Goldman Sachs plays such an interesting strategy in a way because their brand is very strong, right? And people trust the Goldman brand and then they go all across the different areas and collaborate now with tech and and other firms. And then you look at the capitalization of the incumbent banks, you can imagine who has the upper hand when it comes to take over talks. That’s not going to happen that quickly because no one from the tech side wants to get into this compliance and regulatory mess, which I can fully understand.

Will Asian Tech Win the West?

Craig: That’s a constant battle between the incumbents who have distribution and the startups that have innovation and the innovators have to build distribution before the startups can copy their innovation. So do you see the technology side coming from the East being a winner or will they just stay in the East?

Urs: Yeah, that’s the big question mark, which is hard to say right now, but I would imagine from the FinTech side where scale, like what WeBank to us in from China, they can onboard up to a million clients or even more per day. We talk about the simple onboarding, of course, not the full KYC like you would have it in wealth management and you think about the scale and how they operate. Several marginal costs per transaction then you can imagine they will enter the market and merchants who have to look at the margin, I mean I would try to benefit from it, but when it comes to wealth, there is much more trust needed. The question is how for instance, will Alibaba with ANT Financial, if the cloud offering will play a role here? I mean in some ways they already work together with Western banks but more from an artificial intelligence part of view. Because they also did some smart takeovers and try to leverage their capabilities. But on the other hand, when it comes to the more complex side of wealth management, you cannot compare these offerings on these big platforms in the East with what we offer on the Credit Suisse, Julius Baer platform.

Craig: Well why not? Why can’t you compare it? The consumers are comparing, aren’t they?

Urs: I mean, first of all, you have the regulations so you need to be a professional investor, right? To invest into some alternative investments or things which have structured a product, a criteria, etc. So it’s not so easy to go in, you have a lot of obstacles and you cannot just expand that range into new client segments. Even if you want to do so, there are many factors playing into this. I could imagine that because of the different cycle dynamics of emerging markets growing so fast, there will be new products coming. And usually how it plays out was you bring wholesale concepts and make them retail capable. So like TransferWise for me, it’s like almost like the continuous settlement approach you have between investment banks when they started to have a central clearing house for foreign currency transactions.

Craig: Yeah. So you mentioned TransferWise a couple of times. So I use TransferWise quite a bit and actually there aren’t that many options. One of my daughters is going to school in London, so I regularly every month do a transfer of dollars to pounds. And I bounce back and forth between TransferWise and OFX, which is another similar startup. And I just look for which one has the best rate. It’s usually only a dollar or so difference. But I’ll just pick that one cause it’s easier just to click and go. Although I do like TransferWise’s user interface better, but it just shows how little that means, for a dollar I’ll use the other service.

Urs: Yes. And that’s the expectations of the younger generations going forward. They are used to this, to pick and choose the services. If that app doesn’t work, kill it, next one,

Craig: Let me speak for the younger people here that we feel that way. Yes, we’ll just kill it and just jump onto the next one, which I do all the time.

Urs: Exactly. And I think that will be where the worlds will come together. So I think the ones that will win, can automate all these processes, because how can it take weeks to onboard a client in wealth management when it actually is a standard process? And if you have the information at hand, you just have to digitalize it properly, and it still takes so long. So this is something which has to change and probably will change because you also have the regulations. We are the financial action task force, we have common reporting standards, automated exchange of information, et. A lot is driven out of the U S and, and literally pushed over the rest of the world. But it should also help to standardize a lot of processes hopefully. And then the other big trend is open banking, which will then help hopefully to automate all these standard banking process, which we just mentioned because the cross border transfer, it should be even easier than with TransferWise. But that should be just part of the foundation of banking. And on top of that, you would offer them the wealth advisory, you can offer product based on that and you can start creating value proposition along around lifestyles, like gig workers, executives.

Craig: But TransferWise and OFX, they’re a very small portion of the industry. They only do one thing, which is transfers. So do you see them moving into wealth or do you see them being bought by other wealth firms to be an extra service for their clients?

Urs: It’s a good question. I believe so far they really tried to stick to the global cross border payments market, which is by itself huge. They’re hungry to have billions of dollars transferred between countries. I don’t know the exact figure between Mexico and the United States, but these are huge figures and obviously the banks earn a lot of money with that. So if TransferWise is the leader or one of the leaders they also have Western Union as competitors, etc. I think that is one of the recipes, and they also work together with banks. It’s a bit like Ripple with their blockchain protocol that TransferWise also collaborates with banks to offer them their process and services to reduce their transaction costs. So I think they will continue doing that. But others like Revolut and N26 and especially the ones from the East, they obviously all go to a super app.

Super Apps & the Asian Payments Market

Craig: Super app. That’s what we hear about, super app. When will we get super apps?

Urs: Yeah, it’s already here. You have it. I mean if you look at your phone, I just don’t have it with me, but you go into WeChat. I mean I can see all the apps available because I’m not Chinese, but the international version already has like several dozens apps. Same with Alibaba or the Alipay app. So you actually access insurance, simple savings, then you have a piece which helps you as a tourist to top up the volume of your foreign card, which they introduced at the end of last year. And it works, as I noted in early December. So this is already reality and Grab has dozens of apps already on it. These people don’t use a computer anymore. Like we choose to interact right now. They only know the smartphones.

Craig: Indeed. But will that take on in Western countries?

Urs: I mean we have already the app stores literally in a way you can say Google Android is also huge app store, right? I mean the whole Google play thing. But what they did is they built an app on Android and added apps into their universe. That’s the interesting bit because most of the people in China, they use Android, right? So you have of course iPhone and they have the same thing there too, but most of them use it and now they are building their own version for different reasons.

Craig: So you’re saying we already have a super app, it’s just our phone in general is itself a super app.

Urs: In a way it is, but it’s not coming from one platform. So WeChat is the platform built on an app and it allows collaborators and merchants and whoever financial service providers to be part of it.

Craig: So I read a lot of articles about super apps and it seems the sentiment is they’ll never work in the US or Europe. What would you agree with that or do you disagree?

Urs: I don’t know whether it really matters that much, it will probably come and it may be in a different shape because we have still so many different channels and different needs. Right? But it doesn’t really matter. As long as you offer value and the proper service, then you’re going to use it.

Craig: Well that’s true. But the question is where are we going with wealth and will wealth take on different forms? Will wealth be splintered and fragmented into separate small little areas? Like you’ll have a bit of your wealth here, a bit there if you will, or will it be concentrated in one-

Urs: No, it will be split because think about what’s going on in the world. When you think about the values, what people represent, how they go through the day and what they care about most, then you already see the fragmentation. We have a lot to a lot of talk about climate change, climate justice. Now if you’re a poor person in some counties which can’t really afford to even think beyond the next week, you probably don’t have the same issue. I know the Philippines very well, for them it’s different. We have to accept that not everyone has the same worldview and in the West we have often the decadency to believe that everyone should think this way, but that’s not the case. So then you have different lifestyles coming in and all to serve all this out of one platform out of one company, in my view, is far too complex. So I think the fragmentation and the sub segmentation will continue and it will become much more complex. And because of the bigger complexity, we’ll see platforms coming in, which to some services and offer that to many. But because of the complexity going on on the socioeconomic, art, etc, and different intergenerational challenges, you see more and more boutiques coming up independent advisors serving a very specific needs and group of people. And that will probably help the intermediary business to actually be even bigger than it is today, probably many different players in it. Because today it’s more like in the States, brokers, broker dealers here, it’s more like former private banks which became independent but still have the assets that come with a bank. I mean that’s the commonality you have in the States too. But you cannot really serve all the different client needs out of one person.

Urs: So you have to ask, what is your value proposition and who do you want to actually serve? You’re pessimistic that super apps will take off in the US and because of that they will, because super apps can serve very specific needs, right? So they focus on very specific client personnel. They have different needs than a freelance person has a different need than someone who is an executive or someone who is already a wealthy serial entrepreneur. And these people have different needs. Some of them want to to trade, they want to decide themselves, others are happy to hand it over and have it run. And I mean, when I look at, even myself, I’m not a rich person. Compared to someone in the merchant market, probably rich, but in Switzerland then we are all rich, right? I have, I don’t know, two thousand apps and have at least four different apps that I can access part of my wealth, part of my pension money, which I reinvested it went all total digital with a very nice WealthTech in Switzerland, which focuses only on voluntary pension investments, right? Which is tax deductible and then others have their own app. They’re all coming from one specific provider. What could happen in the future is that for instance, UBS, we have a huge client base serving across the world that they might say, let’s do a super app approach because it comes in similar flavor usability but we can communicate with target groups which they otherwise couldn’t and then they have actually the data about their clients. If you mix that together with big data coming maybe from Google, then you can imagine what can happen. The big thing in China is that WeChat Pay, Alipay, they dominate the payments market. They know exactly what’s going on, right? And you see that now with the Coronavirus, it’s interesting what they can track.

Craig: They know more than the government knows.

Urs: And the rest is Google, because all the searches go via Google and they have Baidu in China, but that’s going to happen. So it’s a big data play. That big data should help to serve the needs and to be hyper-personalized and pre-decided personalization. You know the super app approach could be one of the options, how to play it.

Craig: We will see. So one thing I’m seeing a lot and one theory I’m working on is that, in the US at least, app-based wealth platforms will soon take over because of the sheer number of users they have. Acorns is already over 5 million users. Stash is 4 million users. MoneyLion has got 4 million users. They’re all offering wealth products as well as checking accounts and lending. And that’s 15 million users, 20 million users, clients just in a couple apps. And that’s more than most banks have even the biggest banks. So do you see that also happening in Europe?

Urs: Absolutely. I believe it will, but we shouldn’t forget the last week, two weeks ago we did the workshop, we redefined wealth management, which goes beyond just the financial needs and the investment needs, right? So, again, it should include the values, like environmental sustainability, governance. It’s about these aspects. And what are these, I think you will need to go beyond the current definition of wealth to holistically remain the trusted advisor of your clients and especially of the younger generation, right? So that will also require a new approach, which I believe will then end up as ecosystems which will then be very fluid. And an ecosystem is not the platform, you can’t control it anymore. I think these incumbents will have to learn to become more agile and more client-driven and offer their advice, these capabilities, and also in a way freedom that they can actually go into these communities and be the trusted advisor. Now it’s a question of how as a private bank wealth manager do your position yourself. I think do need to make some strategic homework and you need to think further along the timeline so that you are ready when these things come and not be totally taken by surprise.

Craig: Or else they’ll be out of business.

Urs: Yes. But as we see, wealth is not a fast moving business. It’s a rather slow moving business. But in 10, 20 years, if you want to still have access to the growing asset base in Asia, I don’t think you can just rely on the ultra wealthy, even though there will be more and the wealth might be inflated too, but nonetheless, they will be more, it won’t be enough for everyone.

Craig: Right. There aren’t enough ultra wealthy people to be customers of all the all the firms that want them.

Urs: Yes. Exactly. That’s clearly what I see. The margin share is huge on that end.

Craig: Urs, thank you so much. This has been very informative. I really am glad we got the chance to talk and thank you for sharing your views with everyone.

Craig: Thank you Craig.

Craig: Hey, it’s Craig again. I hope you enjoyed this episode with Urs Bolt. Just a couple of things I learned from this episode. I was really interested in what Urs had to say about a super apps, especially apps from PingAn, LuFax, Grab, of course WeChat, ANT Financial he’s got some great advice. He’s traveled to China a number of times so he’s got some on the ground research. So great to hear from him, also from other places he’s been to and how other countries are approaching digital advice and digital wealth and how they’re taking advantage of how far behind they were in technology, but they’ve caught up and they leapfrog all of us who were stuck in older technology and they don’t have all the legacy tech to deal with. So going beyond the current definition of wealth to become a trusted advisor, something that Urs is promoting. And one thing he mentioned when we were talking before the episode, which I don’t think we got to, he said this WealthTech is not FinTech, right? So WealthTech is a subsidiary of FinTech or a subset, but it’s not the same as FinTech. And I really liked the way he said that. And I believe it, WealthTech is its own thing and we’re all into it. And before I forget, make sure you give us a five star review on iTunes if you enjoyed this episode. I greatly appreciate it and I’ll talk to you next time.