Open Finance Empowers Clients and Facilitates Advisor Discussions
In banking, global online and digital payments companies are dramatically changing the way that individuals interact with money and manage their finances. FinTech apps are transforming the wealth business, and while data aggregation take-up is slower in wealth management, it appears increasingly likely as greater innovation comes to market. The term ‘open finance’ refers to consumers accessing all of their account data for banking, investment and insurance products. This financial freedom enables consumers to take advantage of new products and services regardless of their source, and the data allows financial institutions and advisors to better understand their clients. While US data privacy issues and reluctance among European financial institutions exists (EU regulation doesn’t include wealth), an eventual increase in investor demand will likely start to influence market dynamics.
Financial data aggregation providers are moving through a period of change. All eyes are on data privacy, protection and use. Regulators are active. Standard protocols are in motion. Acquisitions are changing the dynamics and resources of providers. FinTech startups continue to innovate and bring new ideas and options to end clients. The advisory business is competitive, and advisors are looking for differentiating qualities to provide value to investors. As market innovation creates product and service options that trigger opportunities for investors to improve their relationship with money, advisors can better differentiate their offers with data aggregation knowledge.
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