Digitalisation Fuels Growth

The wealth management industry is rapidly evolving, driven by technological innovations and increasing regulatory pressures. A recent Deloitte report forecasts a 6.6% CAGR growth for the global wealth management market from 2021 to 2028. This growth is propelled by the widespread adoption of digital tools and platforms that enhance client experience and operational efficiency.

Markus Alin, CEO of Sharpfin, remarks, “Our platform addresses the demographic shift to younger, tech-savvy generations and the rising demand for ESG-aligned investments. We meet the need for hyper-personalised, data-driven models, comprehensive client views, faster onboarding, rapid talent development, and operational excellence, enabling wealth management firms to thrive in this evolving landscape.”

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Commitment to ESG and Technological Innovation

Sustainability and ESG (Environmental, Social, and Governance) factors are becoming pivotal in investment decisions. A PwC report predicts that ESG assets will make up 57% of all European mutual fund assets by 2025, driven by investor demand for transparency and responsible investment practices.

Sharpfin’s recent partnership with climate fintech firm Datia enhances Sharpfin’s platform with detailed sustainability indicators and comprehensive reports, ensuring compliance with the EU’s MiFID II regulations, which require the inclusion of clients’ sustainability preferences in investment decisions.

“With this partnership, we now have a solution that empowers wealth managers to provide intelligent and tailored advice to end clients, encompassing a broader range of their sustainability preferences,” said Markus Alin, founder of Sharpfin.

Sharpfin continues to chase ever increased utility for its clients, with its cloud-based administration platform reducing administrative burdens and improving compliance for wealth managers. Recent upgrades include a cutting-edge performance management feature and automated TRS2 reporting, providing detailed portfolio analysis and ensuring regulatory compliance.

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Client Success and Market Expansion

Clients such as Simplicity, Strand Kapitalförvaltning, Consensus Asset Management, and Evli have reaped substantial benefits from Sharpfin’s solutions. For instance, Evli has streamlined its wealth management processes in Sweden and aims to grow its managed assets from SEK 11 billion to SEK 35 billion. Frida Emanuelsson, COO of Strand Kapitalförvaltning, praised Sharpfin, stating, “With Sharpfin, we’ve cut 33% of administrative costs while significantly enhancing our customer reporting quality.”

Two other major clients of the Sharpfin suite, Consensus Asset Management and Noon Invest, have reported significant benefits. Consensus Asset Management highlights improvements in advisory processes by up to 75%. Noon Invest, known for its forward-thinking approach and integration of robo-advice technology, claims that “Sharpfin’s platform is crucial for portfolio rebalancing, client onboarding, KYC processes, integration, and reporting as we aim to redefine wealth management in Norway by making it more accessible and efficient.”

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Future Plans and Technological Advancements

Looking ahead, Sharpfin focuses on gaining market share in the Nordics before expanding globally. Untapped areas of wealth management, traditionally served by legacy solution providers, present significant growth opportunities. For instance, Sharpfin services both distribution and fund management for clients like Evli.

Markus Alin, CEO of Sharpfin, remarked, “We recognized early on the need for high-quality wealth management software across the industry. We now have a solid base with some of the most well-known wealth managers in Sweden, where we have proven, market-leading customer satisfaction. This forms an excellent platform for expanding our offering into other, even more profitable areas of wealth management. Our recent delivery to Evli Funds is an excellent example of this.”

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Industry Trends and AI Integration

The integration of AI could help transform the wealth management industry, by enhancing advisor-client relationships and increasing operational efficiencies. Capgemini’s 2024 report highlights the importance of AI in optimising workflows and delivering hyper-personalised financial services, crucial for attracting both younger, digitally native investors but also new talent.

Sharpfin is at the forefront of the AI revolution, but the company's standpoint is to be cautious about how to use AI in order to create the most value for its clients.

Markus Alin, CEO of Sharpfin, stated “I personally think that the industry is more interested in the concept of AI itself rather than understanding how it works and where it can be used in an optimal way. Generative AI, like that used by OpenAI for ChatGPT, excels in processing language, images, video, and music due to extensive training data. However, applying it to sophisticated wealth analytics is premature as sufficient training data and time are lacking. The amount of training data and the time the AI had to train to make informed decisions is simply not there yet.”

However, there are areas where generative AI can provide really great enhancement within wealth management. As pointed out in the Capgemini report, it can e.g. be used as tools for the younger generation who have incorporated AI advisors in their daily lives.

"Many of our clients are concerned about 'the great wealth transfer', i.e. how to keep the managed capital with the succession from the older to the younger generation. AI advisors can be of great help here and we will most certainly see this with most of the progressive wealth management systems in the near future, including Sharpfin. At Sharpfin we are currently focusing on implementing machine learning to improve workflow efficiency. Our new bookkeeping module, for instance, operates differently from traditional systems, resulting in increased operational efficiency.”, concludes Sharpfin CEO, Markus

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Supporting Growth and New Investment

Katalysen is proud to have been a shareholder in Sharpfin since 2018, and we continue to support and advice Sharpfin's growth and strategic expansion plans.

"We value Sharpfin's strong customer base with highly predictable cash flows, long customer relationships with low churn and of course the great team" says Peter Almberg, CEO of Katalysen.

To support the increased growth rate over the next three years, Sharpfin is welcoming new strategic investors and partners.

"We are delighted to have Katalysen Ventures and its network of investors as part of our solid ownership base. Our collaboration brings more than investment capital to the growth of our company. They live up to their vision of being a venture developer and are a natural business development partner for us," said Markus Alin, CEO of Sharpfin.

For more information about Sharpfin’s latest developments and solutions, visit their official website and follow Sharpfin Insider.