WealthTech Solutions Market Assessment, By Component [Solution, Services], By Deployment Mode [On-premises, Cloud], By Enterprise [Large Enterprises, Small and Medium Enterprises], By End-user [Banking, Investment Firms, Wealth Management Firms, Others],

WealthTech Solutions Market Assessment, By Component [Solution, Services], By Deployment Mode [On-premises, Cloud], By Enterprise [Large Enterprises, Small and Medium Enterprises], By End-user [Banking, Investment Firms, Wealth Management Firms, Others], By Region, Opportunities and Forecast, 2017-2031F

Global WealthTech solutions market is projected to witness a CAGR of 16.23% during the forecast period 2024-2031, growing from USD 5.11 billion in 2023 to USD 17.02 billion in 2031. Several influential factors are combined to drive robust growth in the WealthTech solutions market. Thus, with a new drive toward customizable, on-demand value propositions, interest in digital financial services continues to gain an edge, encouraged by advancing technology and a shift to more user-friendly platforms, further supported by better customer service or innovation at all costs. Another big push is the blockchain technologies for transformative solutions that attract investments. Parallelly, sustainable investing is gaining positive momentum, with investors looking to reshape the way they assess their portfolios with ethical and environmental considerations. Other drivers include low-cost investments that are accessible to the broad mass of the population and democratizing ways through which people can manage wealth. It is underpinned by the changing dynamics of financial regulations and government policies that set the landscape. Moreover, high demand for state-of-the-art technologies, including artificial intelligence, machine learning, and big data, lead to developments and efficiencies in the sector.

WealthTech refers to the use of technology investments that enable the improvement and optimization of wealth management and financial services. It can be comprehended by quoting innovations such as robo-advisors, digital investment platforms, and advanced analytics, which will improve efficiency, access, and personalization in the management of investments and financial planning. In August 2024, InvestorAi, an AI equity investment platform, raised USD 10 million in its Series A funding round from Ashish Kacholia, founder of Lucky Investment Managers, and associates. The funds will be used for the development of new AI-based products and scaling up its sales and operations in India in light of the enormous market opportunity.

Rise of Fintech Sector Drives Market Growth

Fintech players fundamentally changed the delivery of financial services through a shift to online and mobile channels, which digitized vital processes to provide quicker, more convenient, and less costly solutions. The recovery of the global economy further entrenches trust by banks, insurance companies, asset managers, and consumers in fintechs through the broad adoption of high-speed and secure internet and mobile technologies. This has prompted banks and insurers to buy fintech solutions to drive margins higher and attract younger customers. The increase in venture capital and private equity funding has further supported exponential growth in FinTech companies, most of these companies are focused on hyper-growth strategies that enable financial institutions to provide global access and innovative solutions, improving investment management through cost reduction and revenue-boosting modifications. In June 2024, at Money 20/20 Europe, Papara, which is the current market leader in Turkish fintech, announced its partnership with DriveWealth, a leading financial technology platform offering brokerage-as-a-service. The partnership will give Papara's 20 million users the power to invest in real-time in the United States stock markets on NASDAQ and NYSE, starting this October.

Growing Demand for Predictive Analytics Technology Boosts Market Growth

Predictive analytics involves the use of statistical and modeling techniques in projecting future outcomes and performance based on analysis of present and past trends to know if such events are likely to occur again. In this respect, predictive analytics provides insight into the current financial situations of clients at WealthTech and potential needs that may require management, thereby helping advisors to understand better and address the requirements of their clients. This technology is essential to WealthTech companies as it can give them critical insights into client behavior and help improve services and products. In 2023, InvestCloud announced the next evolution of InvestCloud White, InvestCloud White FMB+. InvestCloud is the global leader in digital transformation for the financial industry, with over USD 6000 billion in assets. The new product offering brings under one roof integrated front, middle, and back-office InvestCloud solutions plus simple multi-channel wealth management services to provide comprehensive tools to advisors and other wealth managers. If predictive analytics gets integrated, then it would have an additional revenue push for the solution providers within the WealthTech realm and create significant growth opportunities in the WealthTech market.

Solution Segment to Dominate WealthTech Solutions Market Share

The solution segment dominated the market share in 2023 and is expected to grow further. The WealthTech solution is increasing with the high adoption of automation solutions across industries. Many small consulting companies and significant banks understand new generation client demands such as tech-enabled financial solutions, automatic rebalancing, and portfolio building, they focus on changing the sector by finding inefficiencies throughout the financial services value chain. In May 2024, Wealthfront announced the first-of-its-kind Automated Bond Ladder, which is going to revolutionize how investors achieve maximum interest on their extra cash with the United States treasuries. This new offering in its suite of products is an investment that provides liquidity, low risk, and a steady yield, that is much more tax-efficient compared to a savings account or current deposits. The vendors of software solutions are dedicated toward wealth managers, proposing private banking departments, and asset and wealth managers with the cloud-based solutions to raise customer satisfaction, simplifying and digitizing the entire value chain, enrich reporting, and re-build margins.

North America Dominates WealthTech Solutions Market Share

North America dominates the WealthTech market as it holds key financial centers and countries, such as the United States and Canada, possessing a well-established technological scenario. This would rapidly alter the strategies for wealth managers to merge technological advancement into their wealth management solutions. It can be attributed to the fact that the development of new and innovative business operating models, together with hostile efforts by new competitors, has boosted the wealth management business in North America to capture a share of the world's biggest market for investment securities. In 2024, Corient Private Wealth, the United States-based wealth management firm designed for high and ultra-high-net-worth clients, has chosen Addepar as its premier platform for consolidating client portfolio data and performance reporting. With over USD 1601 billion under management from the client's portfolios, Addepar is about to be Corient's only solution for portfolio data aggregation and performance reporting. Moreover, banks and other private companies expect wealth management advisors to create enormous demand for updated financial advice that would meet their specified needs.

Future Market Scenario (2024 – 2031F)

Millennials and Generation Z are rapidly becoming significant consumers of financial products and services. Their needs are currently inclined towards innovative digital solution offerings, and the WealthTech firms will scale up to address them very soon.

Investment companies and property management firms across the world are heavily into cryptocurrencies such as blockchain.

WealthTech solutions educate users on financial planning, financial investment, retirement planning, and other canvassed areas through user-friendly interfaces and educative content.

Key Players Landscape and Outlook

The landscape of WealthTech solutions has been very crowded, as it has been a market for many emerging new players. WealthTech solution innovators are in the form of in-house or outsourced technology that comprises the market size. It helps companies related to wealth management with their activities. WealthTech companies are focusing on a transformation of the industry by identifying inefficiencies along with the value chain. Key companies are attempting to deploy benefits that include effective portfolio management, increased assets' liquidity, an improved customer experience, a clear view into costs, better advice, easier transaction technologies, and opening the market for alternative investments with private equity and hedge funds.

In February 2024, Aixigo and Raise Partner announced their partnership. The two will work together on integrating Raise Partner's Smart Risk into Aixigo. BLOXX will extend capability into investment advisory, portfolio monitoring, and analysis. The partnership thus becomes of strategic importance to Aixigo for further development of its platform and the growing requirements from the financial industry.