How is Wealth Management Evolving and What is our Role in it?

Canopy Team
Sep 18, 2018 · 4 min read

The premise upon which wealth management exists is based on the fact that clients are time poor and behave rationally to accommodate for this. They worry about counter party risk and will always diversify banks/custodians. Traditionally, Relationship Managers (RMs) within individual commercial banks cater to this need. Performance on portfolios would then vary depending on the bank’s RM team.

But how does Wealth Management compute in the digital revolution?

Despite the trend of increasing venture capital investments in Fin-tech since 2014 (with more conservative outlooks as of 2016), wealth management has always been considered to be on the non-disruptive side of the financial system, and ultimately,non-threatening against/ towards banks. This is because wealth management startups also seem to align best with financial institutions in term of extending its quality and line of services whereas this may not be the case in competing, and upcoming tech, such as robo-tech and the rise of e-wallets. Yet this non-threatening trait has also characterized its success; Canopy for example has partnered with Credit Suisse, and more recently with Bank of Singapore, in supplying an aggregated view of all their clients portfolios across different custodians under one space, under one universal language, and by taking all bank statement formats. While more about Canopy will be developed on further below, the latter’s example encapsulates the shift of perspective from custodians, in allowing to integrate various external resources (insurance-tech, AI, and now e-wallets more commonly) under their wing.

Hence, “non-disruptive” fields of fin-tech, such as wealth management, have become a comforting word to financial institutions, or adversely, a boring one in more recent times. Naturally, high risk is analogous to high rewards and non-disruptive services therefore don’t seem as tempting. This results in contradictory and inconclusive trends of financing for this fin-tech category, however, characterizing high reward in such a way should be cautioned. As those of the United States may know, Mint has become as common as any other app targeting those in the 20 year old threshold. Mint is a money management and tracker app that has done tremendously well; it provides a simplistic view of what Canopy offers on a layman’s level by aggregating accounts across banks and platforms. Since Mint’s inception in 2010, its growing customer base now serves over 10 million American users today. Mint is considered a standalone service that in spite of being non-invasive or threatening to other fields, has made this niche market, unhindered by rivalry, a successful one.

In other words, Wealth management fin-tech services, as epitomized by Mint’s presence in the US, is a silent juggernaut of an industry that despite being overshadowed by others in fin-tech, continuously makes waves with its consumers. Additionally, as alluded previously, a parallel trend from the public consciousness is the awareness that adopting a responsive digital strategy is a must. The dint this has made on banks has been similar and on the rise. The increasing number of fin-tech oriented banks is catching on the mainstream adoption of robo-advisors (to supplement RM assistance and offer 24/7 support) by merging teams inside and outside the bank to create innovation centers. While services like Canopy are just entering the market, it is still unknown how services like these will grow. Will they have a tendency to seep into a series of semi-internal products (like robo-advisors), or will they remain a one stand-off product (like Mint)? Nonetheless, it is clear that Canopy (and others like it) has all the elements to resonate in the same way as the other two have and proving it today that it can pave a new way of doing things. Well on its way to partnering with other custodians, and being unfettered by competitors/ saturation of the market, Canopy may very well become a custodian’s newest and strongest ally.

What makes Canopy different

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“Credit Suisse Enhances Digital Private Banking In Hong Kong With FinTech Partnership For Account Aggregation Solution” — JumpStart ; Francois Monnet ( Greater China Chief Executive, Credit Suisse) and Tanmai Sharma (Founder and CEO of Canopy)

Canopy is an account aggregation platform that can be considered a virtual ‘one-stop shop’ for clients and custodians; it serves as a separate and extended arm to these entities and streamlines processes of labor for its employees — such as showing RMs how to work more efficiently. Additionally Canopy offers due diligence customized reports across banks for its clients. Insight reports for example are also available to our clients regarding trending new bonds, funds and other asset performances; we do so through presenting them the latest findings on investment behaviors through our Peer Comparison feature. Moreover, clients, like RMs, have anonymized access to this platform where their cash-flows and asset performance is uploaded, predicted, recorded and available at any time with a log in. Finally, while Mint caters to the USA, tailored to fit its harmonized market, the potential Canopy has is particularly geared toward banks in Pacific Asia due to its fragmented market. Canopy is most useful to clients who lack a bird’s view perspective of their portfolio not only across banks, but across different accounts within and between different regions, market fluctuations and currencies. Canopy’s role and value-add then is to promote a harmonized yet granular view of a client’s finances, where there are none to cater to this end, while also easing the nitty-gritty programming aspects that would otherwise burden current banking operating systems.


Financial Technology

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