Financial technologies are gaining increasing attention from consumers, investors and the media. In a global online survey, the CFA Institute interviewed 3,803 members, all professionals in the financial industry, about their expectations regarding FinTech.
CFA members are of the opinion that financial technologies have the greatest effect on the asset management segment of the financial service industry. More than half of respondents (54%) consider asset management as most affected by FinTech. This is followed by banking (16%), securities (12%) and insurance (8%). Only two percent of respondents do not expect any significant changes emerging from the technologies.
The technologies will help to reduce costs (89%), simplify access to advice (62%), improve product selection (55%), increase service quality and prevent fraud (both 37%). However, the professionals see this potential rather at standardised tasks on the mass market. While 70 percent expect automated financial advice to be positive for "mass affluent" investors, only 24 percent of respondents think so for institutional investors and 41 percent for high net worth individuals.
Respondents also see risks arising from the use of financial technologies, including algorithm errors (46%) and inappropriate consulting (30%). Data protection is the biggest risk for twelve percent of respondents. In verbal interviews, further concerns such as Herding by unifying investment decisions were expressed.