Staying on the fast track

As a former elite athlete, Arnaud Picut knows a thing or two about performance. CEO of aixigo since 2021, and CEO of the Year in the Wealth Technology Industry, he shares the transformations taking place throughout the wealth management sector, and what puts aixigo ahead of the competition.

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Arnaud Picut, CEO of aixigo

Ambiguity aversion is a natural human behaviour. Put simply, it means we will be repelled by what we can’t understand. “Behavioural finance” is the foundation of aixigo’s business model; the idea that to make financial products successful, they must be understandable. aixigo builds fintech solutions that eliminate ambiguity aversion by addressing all ecosystems dealing with wealth management via a unique platform. This is achieved by BLOXX, APIs that democratise the consumption of wealth management services at every level of the sector and enable customers to be onboarded and get access to an entire wealth platform to build, test and go to production in one day.

Wealth management services via APIs were initially created for world-class private banks, but aixigo has democratised this technology and made it available to businesses spanning the entire spectrum, from Family Offices of ultra-high net worth individuals (UHNWIs) to everyday retail customers who simply want to integrate a financial element into their app. The user accesses one platform and orchestrates BLOXX to exactly match the journey the consumer is expecting. The consumer can build their own CX or use ready-made front-ends.

So far, so simplified…but as Picut shares, just like elite sport, “it is relatively easy to reach the top but extremely complex (and costly) to remain there”. The message, therefore, is that fintechs should never forget that what makes them special is the technology they offer, and players in this sector must have the capacity to challenge what they do and how they do it from a ‘product factory’ point of view. Picut believes that for a given company budget, the cost of product line should double every 18 months (in the past, the rule of thumb was every five years). “Never forget the main purpose of a fintech is to build product,” he says. It’s a breakneck speed, but Picut cites a dozen central European wealthtech firms in a state of bankruptcy because ironically, they never invested in technology.

The right gameplan
This double-down strategy might sound brutal, but happily, aixigo seems to have found a balance between ruthless innovation and staff retention. The company recently celebrated its twenty-fourth anniversary, and more than half of its workforce have been there for thirteen years or more. To complement this incredible loyalty, aixigo has launched a three-year plan to recruit new talents with new skills (typically in technology) to transform the company and bring it to the next level to match its vision of serving all actors in the wealth management industries. If new talents and skills will reduce the lifecycle of the platform, it can only increase the speed of embedding new technology to help keep up the pace. Meanwhile, the longer-serving staff provide the sector knowledge and ensure the foundations of the product are right.

Future landscape of the industry
Beyond the forecasts of significant sustainable growth in wealth management over the next ten years, it is also clear that managing wealth is no longer just for the wealthy. There is a growing trend to deliver similar wealth services to other market segments but in a simplified way. Picut believes the future of WM goes beyond the traditional wealth segments like HNWIs and UHNWIs and the financial institutions that serve them, and he shares three interesting development streams ripe for transformation and focus:

Private banks and FOs
Sticking with HNWIs and UHNWIs for a moment, there is a market need to reconcile private banks and what are known as family offices (FOs). The number of FOs has doubled in ten years from 4,100 to 10,000 (some thirty-three per cent of UHUWIs use FOs to manage their wealth) and it is constantly increasing. With this growing demand, firms need to accept the trends and engage in transformation, first to retain and then to expand. This is where wealthtechs have a central role to play to enable open and fair collaboration between the two sides.

Never forget the main purpose of a fintech is to build product

Based on a recent survey, ninety-eight per cent of FOs are aiming to increase collaboration with WM firms in the coming years. FOs need banks for custody, as a product factory, to fill talent gaps, and they need technology to obtain speed-to-market in the rapidly growing wealth markets.

Wealthtech will be the enabler of that new business model. The future of the market is platform orchestration to manage wealth however, wherever, and whenever customers need it, so the name of the game is not to compete but to collaborate as both WM firms and FOs offer something that the other doesn’t have.

Wealth services at point-of-sale
Picut believes that the one of the next big moves in WM is the delivery of wealth services at point-of-sale. Surveys of large retailers have shown that it is not enough to provide funding, they want fintechs to manage money and offer or recommend investments to fulfil their goals while considering their constraints. According to these retailers, WM services are the most powerful weapon to increase loyalty and create sustainable streams of revenue.

This is all about embedding wealth management into a specific CX, like offering a loan when you go to pay for something on an app, or the payment experience when you order a takeaway on your phone. Picut describes it as “part of the democratisation of wealth management services to the lower retail segments”. To make it happen, companies need to deliver a use case that exactly matches with the targeted segment and embed it into an existing journey. This is where aixigo becomes the indispensable yet invisible service.

Collaborative SDG investing
Finally, it seems that collaboration between WM firms/FOs and wealthtech to deliver innovative values is a new way forward. For example, aixigo and radicant (the first Swiss digital SDG bank) have entered a business partnership to deliver an “embedded SDG sustainable investing” offering via APIs. Picut feels it is critical for wealthtechs and fintechs to have programmes like this in place to create certainty and mid- to long-term revenue. The radicant case is an important example of collaborations serving the needs of new generations of investors emerging from the “Great Wealth Transfer“. If the banks and fintech industry do not manage to achieve this, they are also putting themselves in danger.

The Great Wealth Transfer
With the ageing out of the Baby Boomers, the wealth of Millennials is coming closer – a population group that makes up more than twenty-seven per cent of the population. This steady buildup of wealth, gifts or inheritances will release considerable assets in a single stroke, which must be managed properly. Roughly $84 trillion dollars in total wealth is expected to be transferred by 2045. Even though this massive upheaval in the wealth management industry has been well-known and frequently pointed out in recent years, the reactions to it have been somewhat sluggish so far. The next generation of investors have grown up in a rapidly changing world with unique expectations and priorities.

It is relatively easy to reach the top but extremely complex (and costly) to remain there

As these individuals come of age and begin to accumulate wealth or inherit it from their parents, it is important for the WM industry to understand their perspectives and adapt to meet their needs. Little surprise that young investors hold different expectations of wealth and its management compared to their parents or previous generations. Nevertheless, quite a few financial providers continue to use the same strategies for different target groups. In the long term, with a significant wealth transfer on the horizon, there is a big shift in the way advisors should target younger investors. Younger generations as a rule do not prioritise capitalist growth above all else and are acutely more aware of the social and environmental impact of their actions, including financially. WM as a sector needs to step up or lose out.

Traits for success
As a CEO, it seems Arnaud Picut is not averse to rule-breaking, but “if you decide to break the rule then you should know why, and it must be well-calculated.” He has worked with various kinds of companies over his career history, and uses the lessons learned to bring the best of those worlds together and avoid the classic mistakes. “I believe that performance is not one thing but a collection of small things. Many entrepreneurs or sportsman usually like to see the big thing and try to fix it. In vast majority of cases, by improving ‘the’ big thing, you deteriorate others and therefore don’t perform at the expected level. Looking for performance requires a holistic view.”

Picut’s journey reflects a nuanced understanding of success – a blend of calculated risk-taking, strategic development, and relentless pursuit of excellence. By weaving together the lessons learned from his diverse experiences and the financial landscape at large, aixigo is poised to navigate the complexities of the industry’s future, steering clear of common pitfalls and driving forward what is possible.