Presented during the Swedish Investment Fund Association Annual conference, May 21th in Stockholm. Hosted by Fondbolagens förening

1. COLLABORATION BETWEEN
WEALTH MANAGEMENT FUNDS
AND FINTECH COMPANIES
EXAMPLES OF PRACTICES IN THE INDUSTRY
MICHAL GROMEK
RESEARCHER ON FINTECH
SWEDISH HOUSE OF INNOVATION
FONDDAGEN
MODERNA MUSEET, STOCKHOLM
MAY 21ST, 2018

2. IN WEALTH MANAGEMENT, THE [FINANCIAL] INDUSTRY IS CHANGING
FROM BEING A “DISTRIBUTION CHANNEL OF FINANCIAL PRODUCTS”
INTO A “DISTRIBUTION CHANNEL OF FINANCIAL ADVICE”. THIS WOULD
CORRESPOND TO A COPERNICAN CHANGE IN THE WAY FINANCIAL
ADVISORS OPERATE AND ARE COMPENSATED, WHERE TOP
MANAGEMENT HAS TO STRUGGLE WITH, TO MAKE SURE THE FIRMS
THEY LEAD CAN TRANSFORM WITHOUT HINDERING EXISTING
PROFITABILITY.
SOURCE:
SIRONI P. (2016), FINTECH INNOVATION. FROM ROBO-ADVISORY
TO GOAL BASED INVESTING AND GAMEFICATION

3. # INTRODUCTION
# INVESTMENT & WEALTH MANAGEMENT TECH MARKET MAP
# THE OVERVIEW OF THE SWEDISH FINTECH SCENE
# CASE STUDIES
# CURRENT TRENDS
#FOCUS FOR TODAY

4. # RESEARCHER ON FINTECH (SSE)
EFFECTS OF END-USERS TRUST OR DISTRUST ON
TECHNOLOGY ADOPTION IN INFORMATION SYSTEMS
STOCKHOLM SCHOOL OF ECONOMICS
SWEDISH HOUSE OF INNOVATION
PREVIOUSLY:
# HEAD. INT. FINANCIAL SERVICES - FUNDEDBYME.COM
# COUNTRY HEAD - FINTECH ROCKET INTERNET
# TRAINER SECURITIES COMMISSION MALAYSIA
## TRAVEL BOOK AUTHOR (IN THE FUTURE :)
#GOOD TO SEE YOU

5. # STOCKHOLM FINTECH REPORT 2015 - JUN '15
# CHASING THE TALE OF THE UNICORN - MAY '16
# STOCKHOLM FINTECH REPORT (UPDATE) 2016 - JUN '16
# THE NEXT WAVE OF FINTECH - REGTECH & INSURTECH - DEC '17
# STOCKHOLM FINTECH REPORT 2018- JAN '18
# THE RISE AND DEVELOPMENT OF FINTECH, ACCOUNTS OF
DISRUPTION FROM SWEDEN AND BEYOND - BOOK - MAR '18
(OPEN ACCESS)
#CONTINUOUS OBSERVATION OF FINTECH

6. # To illuminate the growing landscape of InsurTech
and RegTech companies that operate on the
Swedish market and arrive at recommendations
for three groups:
> Incumbents
> Startups
> The Regulator
# Landscape mapping 40+ companies
# 11 Case studies and interviews
# 70+ pages of insights
and lesson learned
#THE NEXT WAVE OF FINTECH - REGTECH & INSURTECH

7. WEALTH MANAGEMENT & FINTECH:
REALMS OF COOPERATION
DIRECT INVESTMENTS
IN FINTECH
INCUMBENTS
INVESTMENTS IN
FINTECH FTE
FUNDS
INTRAORGANISATIONAL
COOPERATION

8. WEALTH MANAGEMENT & FINTECH:
REALMS OF COOPERATION - TODAY'S FOCUS
DIRECT INVESTMENTS
IN FINTECH
INCUMBENTS
INVESTMENTS IN
FINTECH FTE
FUNDS
INTRAORGANISATIONAL
COOPERATION
OPERATIONAL
IMPROVEMENTNEW FEATURES
DATA ANALYTICS
COMPLIANCE
COMMUNICATION
CUSTOMER ACQUISITION

9. 0
10
20
30
40
50
Item 1 Item 2 Item 3 Item 4 Item 5
PAYMENTS
EQUITY
COMPLEXITY
VALUE
ROBOADVISORY
LENDING
INT. TRANSFER
CROWDLENDING
BLOCKCHAIN
BASED
INSTECH
REGTECH
GDPR & PSD2
BLOCKCHAIN
BEYOND
BANKING
WEALTH
MANAGEMENT

10. #MAPPING STOCKHOLM FINTECH SCENE
SOURCE: OPPORTUNITIES AWAIT: HOW INSURTECH IS RESHAPING INSURANCE,
GLOBAL FINTECH SURVEY, PWC, JUNE 2016
SOURCE:
GROMEK M. (2018), STOCKHOLM
FINTECH REPORT. AN OVERVIEW OF
THE FINTECH SECTOR IN TEH GREATER
STOCKHOLM REGION

11. #INVESTMENT AND WEALTH MANAGEMENT TECH MARKET
MAP
SOURCE: OPPORTUNITIES AWAIT: HOW INSURTECH IS RESHAPING INSURANCE,
GLOBAL FINTECH SURVEY, PWC, JUNE 2016 SOURCE: DAVIS L, CB
INSIGHTS . (2018), 2018
WEALTH TECH TRENDS TO
WATCH

12. USE CASE #1 - VANGUARD
# WORLD’S SECOND-BIGGEST FUND MANAGE, PLANNED
TO STRENGTHEN ITS PRESENCE IN GERMANY
# ITS GROWTH IN GERMANY HAS TRADITIONALLY BEEN
CURTAILED BECAUSE OF THE SELLING FEES FOR BANKS
AND OTHER DISTRIBUTORS. VANGUARD DOES NOT MAKE
SUCH PAYMENTS
# THEY PARTNER WITH BERLIN-BASED STARTUP RAISIN, A
MARKETPLACE FOR INVESTMENT PRODUCTS,
# FOR RAISIN IT'S A CHANCE TO STEP IN THE RETAIL
INVESTMENT MARKET. THEY HAVE PREVIOUSLY FOCUSED
ON BROKERED SAVINGS DEPOSITS.

13. USE CASE #2 - FIDELITY
# IN 2015 FIDELITY ACQUIRED "EMONEY ADVISORS" - A
TECHNOLOGY COMPANY PROVIDING WEALTH-PLANNING
SYSTEM FOR FINANCIAL ADVISORS. IT WAS
CONTROVERSIAL FOR MANY, (COST: USD250M)
# AIM: SUPPORT OWN ADVISORS & INVESTMENT
# THE COMPANY WAS PRESERVED AS AN INDEPENDENT
ENTITY. IT KEPT ITS OPERATIONS, INCLUDING FINANCIAL
ADVISORY FOR THEIR CURRENT CUSTOMERS AND
SERVING FIDELITY'S COMPETITION IN CUSTODIAN AND
CLEARING BUSINESSES.
# NOV 2017: 'EMONEY ADVISORS' PLAN TO INTEGRATE
WITH SCHWAB ADVISORS, ONE OF THE FIDELITY'S STRONG
COMPETITORS.

14. USE CASE #3 - SYMPHONY
# IN 2010'S GOLDMAN SACHS BUILT A CUSTOM-MADE
MESSAGING PLATFORM CALLED 'LIVE CURRENT'. THE
OBJECTIVE OF THE COMPANY HAS BEEN TO PROVIDE
# IN 2014 GOLDMAN SACHS FOUNDED A COMPANY
CALLED 'SYMPHONY', WHICH WAS BACKED BY 15 WORLD'S
ELITE FINANCIAL INSTITUTIONS TO SCALE IT UP
INTERNATIONALLY AND RECEIVE AN EXPERIENCED
MANAGEMENT TEAM MERGING IT WITH *LIVE CURRENT*

15. # LEARNING – WHAT CAN WE OFFER, HOW DO WE PROCEED
THE LEARNING, HOW CAN WE REDUCE UNCERTAINTY
BETWEEN THE PARTIES? HOW CAN THE INSURTECH FIND
THE INFORMATION HOW TO PARTNER UP WITH US?
# ADAPTATION – HOW WOULD WE LIKE TO INTEGRATE OR
DO WE WANT TO INTEGRATE THE TECHNOLOGY AT ALL?
(LANDLINE PHONE VS. SMARTPHONE)
# LEARNING – INCUMBENTS’ INVOLVEMENT IN START-UP
PROGRAMS SUCH AS INCUBATORS, ACQUISITIONS ETC.
# TRUST AND COMMITMENT – DO WE PLAN FOR LONG TERM
COMMITMENT OR SHORT TERMS GAINS? WHAT IS OUR
LONG-TERM PLAN?
#DISTANCE - REFLECT ON CULTURE AND SOCIAL DISTANCE
AND TRY TO DIMINISH THEM
#COOPERATION CHECKLIST - BEFORE STARTING A PARTNERSHIP
SOURCE: FORD ET AL, (1998), P.18-25

16. # Exploration – incumbents are actively monitoring new
trends and innovations
# Strategic partnerships – incumbents partner with start-ups
and build pilot solutions to test in the market
# FinTech involvement – incumbents’ involvement in start-
up programs such as incubators, acquistions etc.
# New product development – involvement in FinTech could
help incumbents discover emerging coverage needs and
risks that require new insurance products and services
TREND #1 FOCUS ON PARTNERSHIPS:
SOURCE: OPPORTUNITIES AWAIT: HOW INSURTECH IS RESHAPING INSURANCE,
GLOBAL FINTECH SURVEY, PWC, JUNE 2016

17. # M&A ARE NOT LIKELY TO HELP MUCH
SOURCE: SOURCE: FINTECH TRENDS TO WATCH IN 2018, CB INSIGHTS,
(ACCESSED; APRIL 30TH 2018)
12% OF (RE)INSURANCE PROFESSIONALS WITH
KNOWLEDGE OF THEIR COMPANY'S INNOVATION
STRATEGY PRIMARY
OUTLET FOR
INNOVATION
0%
10%
20%
30%
40%
50%
PARTNER BUILD BUY

18. TREND #2: AUTOMATION ON ITS PACE
SOURCE: ADOPTED FROM STATISTA.COM, MAY 2018
(ACCESSED: MAY 14TH, 2018)
0USD
337,500,000,000USD
675,000,000,000USD
1,012,500,000,000USD
2016
1,350,000,000,000USD
2017 2018 2019 2020 2021 2022
"I FORESEE AN
INCREASE"
ASSETS UNDER ROBO-ADVISORY MANAGEMENT GLOBALLY

19. TREND #2: AUTOMATION ON ITS PACE
SOURCE: ADOPTED FROM STATISTA.COM, JUNE 2017
(ACCESSED: MAY 14TH, 2018)
0 USD
375,000,000 USD
750,000,000 USD
1,125,000,000 USD
1,500,000,000 USD
2016 2017 2018 2019 2020 2021 2022
ASSETS UNDER ROBO-ADVISORY MANAGEMENT - SWEDEN

20. FINTECH COMPANIES DO NOT NECESSARILY PROVIDE NEW
SERVICES BUT INSTEAD FOCUS ON PROVIDING SOLUTIONS
FROM TRADITIONAL PROVIDERS MORE EFFICIENTLY.
SOURCE:
GROMEK M. (2018), STOCKHOLM FINTECH REPORT. AN OVERVIEW OF THE
FINTECH SECTOR IN THE GREATER STOCKHOLM REGION

21. YOU NEED TO BE READY TO GIVE UP TO SCALE. WE AS
THE BIGGEST BANK IN BENELUX SOLD SHARES OF OUR
PAYMENT SOLUTION TO OUR COMPETITORS, AS WE
REALISED WE’RE TOO SMALL TO SCALE. MOREOVER, WE
WANTED TO DO SOMETHING BIG TOGETHER.
BENOIT LEGRAND, CHIEF INNOVATION OFFICER ING
SOURCE:
DISCUSSION PANEL DURING EUOROPEAN STARTUP DAYS IN KATOWICE
(MAY 16TH, 2018)

22. # Mobile – With a generation shift of Y & Z generations the
digital world become a mobile-first place. (Revolut, N26,
etc.)
# Customer Experience is chief among the areas where
traditional financial institutions have fallen short. 70% of
millennials would instead visit their dentists than their
bankers.
Harit Talwar, Head of Marcus @ Goldman Sachs
# Human / personal – instant communication and products
addressing specific needs of individuals.
# Acquisition – aggregators & rethinking of traditional
limitations, both technical and regulatory
TREND #3 CUSTOMER CENTRIC

23. # Automation is the king – the Wealth Management
industry is under a pressure of cost reduction and efficiency
increase. The main focus is on these FinTech solutions that
answer these needs
# Strategic partnerships – will play a key role in the
upcoming 12-36 months but are not facilitated correctly yet
# WealthTech involvement – incumbents’ involvement in
start-up programs such as incubators, acquistions, FinTech
hub in Stockholm will create the WealthTech hub in
Stockholm
#SHORT SUMMARY:
# presentation is already on SlideShare.com
# watch the development of Swedish House of Innovation
# stay connected and ask us in case you see some research '
possibilities.
#STAY CONNECTED:

24. COLLABORATION
BETWEEN MUTUAL FUNDS
AND FINTECH VENTURES
BEST PRACTICES
MICHAL GROMEK
RESEARCHER ON FINTECH
SWEDISH HOUSE OF INNOVATION
FONDDAGEN
MODERNA MUSEET, STOCKHOLM
MAY 21ST, 2018
IS THIS
YOU?