Editor’s note: This article is from the micro-channel public number “Zero One Finance” (ID: Finance_01), Author: Yang Ya, 36 krypton release authorized.Under the outbreak of the epidemic, traditional companies once again felt the inevitability of “online” transformation, as did the financial and wealth management industries.Recently, BCG and Lufax jointly released the “Global Digital Wealth Management Report 2019-2020” forecasting that intelligence will definitely become an important direction for the development of the global wealth management industry in the next decade and bring new opportunities and huge opportunities for the wealth management market.Market potential, “Let various institutions achieve 15-30% revenue increase and 25-50% profit, and the entire wealth management market asset management scale to achieve 25-50% growth.”The biggest trend in the future financial industry is that “financial services will be ubiquitous, that is, not at bank outlets.”The report pointed out that the application of various intelligent technologies will allow all types of financial services including deposits, loans, and remittances to go out of outlets and even out of financial institutions, integrate into various online and offline ecological scenarios, and contact and serve more closely.client.Facing the opportunities and challenges brought by intelligence, how do traditional wealth management institutions make up for their shortcomings?Is there only one way to build self-built capacity?In the future benign competition ecosystem, how can traditional institutions achieve industry ecological co-prosperity with many participants in the market, and maximize the release of business value brought by the intelligent era?I. New Opportunities: Expansion of Wealth Management Market by Millennials and Mass Customers Since 2018, the global wealth management market has entered a turning year.According to the calculations reported by BCG and Lujin, the growth rate of the global wealth market in 2018 has fallen to the lowest point in the past half century, and the global wealth market will continue to grow slowly at an average annual rate of 5.7% in the next five years.At the same time, a number of new “wealth users” entered the market-the “Millennials” dominated by the post-90s and the “Digital Natives” that appeared after the 00s officially became the main customer base.These “born online” users are not enthusiastic about traditional counter-type financial services such as banks, but they are a future incremental market that cannot be ignored and are expected to become the largest contributors to institutional profits.Figure 1: The global financial payment management market in 2018 and the market opportunities brought by the affluent masses of the public Source: BCG & Lufax Global Digital Wealth Management Report 2019-2020 continues to use traditional offline services, it is difficult to capture this hugeCustomer base: On the one hand, the setting of high thresholds and high rates makes it difficult for traditional wealth management to achieve effective coverage of the affluent masses of the masses; on the other hand, online and mobile changes have brought about fragmentation and personalization of catalysts.Let customers become more at home with financial services, from the past waiting for customers at the outlets, to capture the moments of customer demand in real time in different scenarios.These two changes need to be solved by intelligent means, and at the same time bring a broad market space.According to the report, the intelligent technology represented by AI can bring 25% -50% AUM growth and 15% -30% income increase to the entire wealth management market.At the same time, by improving the efficiency and effectiveness of the entire value chain of wealth management institutions, it can bring about a profit improvement of 7-12bps per unit of AUM, that is, a 25% -50% profit margin increase.Taking Lufax as an example, based on a large amount of user investment, credit and behavior data accumulated by online wealth management services, Lufax has continuously upgraded the KYC (Know your customer) system. Since 2016, KYC has automatically upgraded more than four trillion products through KYC.Carry out appropriateness matching, intercept more than 3 million risky transactions, and conduct higher quality product safety risk control with lower operating costs.In 2019, Lufax upgraded the KYI (Know your intention) customer intention recognition system, further predicting customer intentions based on behavioral data, realizing timely and timely service, and accurately matching products and services.With the assistance of KYC and KYI, the frequency of user service interactions on the Lufax platform has increased five times over the past, greatly improving the user service area and response speed.2. How do traditional institutions act in the face of opportunities and challenges?Facing the new requirements in the age of intelligence, what actions will traditional institutions take?The report is pleased to find that traditional institutions have reached the incremental market through intelligent applications such as mobile channel innovation, accurate KYC of big data, and intelligent investment advisors to meet the digital and personalized needs of customers in the new era.Even many traditional institutions realize their own disadvantages and quickly acquire and iterate intelligent capabilities through external cooperation.1. Innovative mobile terminal channels. With the trend of mobile terminals, mobile terminals and scenarios have become the new battlefield of channels, and mobile APPs have become the platform foundation for promoting intelligent wealth management.In recent years, traditional institutions have also paid more attention to the construction of mobile channel and bottom-level capabilities.At present, many banks have implemented the “mobile first” strategy, and they are constantly upgrading and iterating on mobile channels. Online and intelligent wealth management functions are also embedded in mobile APPs.From the perspective of the number of mobile banking users, in addition to the Bank of Communications, the number of mobile banking users of the six major state-owned banks has reached the level of 100 million, which has greatly facilitated the promotion of smart wealth management services based on mobile clients.2. Create intelligent investment advisory products Intelligent investment advisory, also known as robotic investment advisory, lies at the core of the unmanned and intelligent operation of the entire process in the investment management value chain. It is an important intelligent tool covering the wealthy customer base of the public.The report also mentioned that for the mass affluent customer base, intelligent investment advisory services based on technology and algorithms can reduce the cost of traditional manual investment advisory and provide “light advisory services” based on specific wealth management goals.Table 1: Sources of intelligent investment advisory products launched by some traditional institutions Source: Public information, Zero One Think Tank Since China Merchants Bank launched the “Capricorn Intelligent Investment” in 2016, many head traditional institutions have launched intelligent investment advisory products, with intelligent layoutGo to the track.At present, the banking department has become a force that cannot be ignored in the intelligent investment advisory market, and many banks have launched intelligent investment advisory products.3. The report on the establishment of a fintech subsidiary believes that traditional institutions generally face constraints in terms of organization, talent, culture, and institutional mechanisms, high department walls, fragmented data and IT systems, and scarce embedded IT resources and technical talent.And so on, all have seriously restricted the potential of traditional financial institutions to move towards data-driven and release intelligent value.In order to break through the shackles of institutional mechanisms and cultivate a corporate culture that supports innovation, many traditional institutions in the industry have established fintech subsidiaries to focus on the development and innovation of fintech and underlying technologies.Table 2: Banking fintech subsidiaries Source: Public information, Zero One think tank 4. Seeking external cooperation to empower In addition to self-built capabilities, major traditional institutions have also begun to choose to cooperate with fintech companies and Internet giants for rapid accessAnd iterative intelligence capabilities, make up for its own system constraints and iterative speed disadvantages in technological breakthroughs and innovations.Table 3: Wealth management modular applications and intelligent solutions provided by some domestic and foreign fintech companies Source: Public information, Zero One think tank Internet giants have carried out many cooperations with traditional institutions due to their own traffic advantages and technical capabilities.There are also many fintech companies that provide modular applications and intelligent solutions to traditional institutions. These fintech companies are also important targets for traditional institutions to seek cooperation.The report points out that these products or solutions can generally be divided into two categories: one is to start from a pain point in the value chain of intelligent interaction, investment research, and risk control; the other is to provide front-end, middle-end, and back-end end-to-end intelligenceTurn into a total solution.3. In the future benign competition and cooperation ecology, the advantages will complement each other to realize the co-prosperity of the industry. It can also be seen from the intelligent actions of traditional institutions that the relationship between traditional institutions and emerging technology and Internet companies has shifted from “no fear” or “strong threat”Transformation into “win-win cooperation”.The report believes that traditional institutions, fintech companies and Internet companies have fully recognized their own advantages and shortcomings, and found their own ecological place in the process of intelligent wealth management, and gradually formed a benign competition ecosystem with innovation as the core..Table 4: Advantages and shortcomings of different types of wealth management institutions Source: BCG & Lu Jin’s “Global Digital Wealth Management Report 2019-2020”, Zero One Think Tank, a benign competition ecosystem, different participants on the supply side of the marketIn addition to business cooperation, we are also cooperating in various aspects such as professional knowledge, data and scenarios, algorithms and technologies, to achieve industry prosperity.Traditional institutions rely on their own professional capabilities and service capabilities to reach cooperation with fintech companies in a more open attitude and in a variety of ways to make up for shortcomings in technology and support systems.Internet platform institutions represented by BATJ have gradually focused on the technology layer and infrastructure layer to build the bottom core of the financial ecosystem.Fintech companies such as Lufax have also undergone a change in model and role: from a single 2C model to a 2B2C model, from a market disruptor to a collaborator and enabler of traditional institutions, providing a certain field for traditional institutionsOr end-to-end solution.Figure 2: Traditional financial management institutions, fintech companies, and platform-based institutions mutually promote each other, and ecological co-prosperity Source: BCG & Lufax Global Digital Wealth Management Report 2019-2020 Future, no matter for traditional institutions or emerging institutions,To seize new opportunities and build a moat in the era of intelligence, the report believes that organizations need to build an intelligent system around the three aspects of “number, use, and rule” to build core capabilities.Figure 3: “The Number, the Number, and the Number” Intelligent System Source: BCG & Lu Jin’s “Global Digital Wealth Management Report 2019-2020” “The Number” means building more scenarios and connecting the scenarios to create an open ecosystemGet more massive, multi-dimensional, highly relevant data; “Usage” needs to start from reviewing the customer value proposition and carry out an end-to-end, comprehensive customer journey reshaping; and “Governance” proposes to the institutional support systemNew requirements.Therefore, for traditional institutions, in addition to the existing intelligent actions, the core capabilities need to be structured more systematically in the future.The report proposes that, first of all, data and scenarios, especially highly relevant data and scenarios, are far more important than the algorithms themselves. Traditional institutions should adhere to the concept of open collaboration and actively build and widely connect scenarios to obtain a steady stream of data.Figure 4: Massive data and application scenarios on AI capabilities and moat building Source: BCG & Lufax Global Digital Wealth Management Report 2019-2020 Secondly, in the reshaping of customer journeys, traditional institutions traditionally use only wealthThe level and age of customer groups are not ideal. They need to incorporate “customer voices and ideas” to achieve more precise customer groups, more detailed customer insights, and more matched value propositions. At the same time, traditional institutions also need to think about customers.Reengineering the operation process to match the journey, fully integrating intelligent applications into the operation process.Finally, the supporting system that matches intelligent applications requires the construction of data-driven organizations, talents, and cultures. However, traditional institutions still have constraints in this regard, and they need to establish a centralized and powerful “central Taiwan brain” on the organization.”In order to make up for the shortage of scientific and technological talents required for intelligence, and to establish a data culture, collaboration culture, and agile culture in culture.Facing the future, as market supply-side participants have their own advantages, it is also more likely to strengthen cooperation in the future to achieve complementary advantages and expand end-to-end service capabilities.In addition to cooperation, major institutions also need to build capabilities around three aspects: “have, use, and rule”, expand their own differentiated advantages, and become kings in their fields..
In the era of intelligence, how should traditional wealth managers respond to AI challenges?
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