To become a billionaire, you need to benefit 1 billion people. How WealthTech helps with this

To become a billionaire, you need to benefit a billion people. I first heard this idea in 2017 at an event at Singularity University (California, USA), where I was studying. It stuck with me and greatly inspired me. I was drawn to Silicon Valley by my interest in the technology sector. I believed in this industry—as a businessman, a visionary, and an asset manager.

A couple of years before my trip to Silicon Valley, my team and I began investing in growth sector stocks. Initially, we acted on instinct, but by 2017, I decided to travel to California to speak with representatives of high-tech companies, gain a better understanding of their businesses, and learn more about their processes. The investment strategies built around growth stocks proved to be very successful, even despite the sector's decline at the end of 2021.

Why is there so much money concentrated in technology?

Money is a form of social energy; society effectively votes with its money for products or services that solve its problems or meet its needs. Technology has the capacity to address a wide range of issues affecting a vast number of people—billions, in fact. Take, for example, the widespread problem of scarcity.

"Technology is a force that turns scarcity into abundance," says Peter Diamandis, a billionaire and co-founder of Singularity University. This principle applies to every area of human life, whether it be healthcare, the food industry, engineering, or finance. Fintech, which merges finance and technology, is a perfect example of this. Thanks to neobanks, financial transactions have become faster and more convenient, contributing to the growth of a cashless economy. In the UK, EU, USA, Canada, Australia, Singapore, Hong Kong, and the Middle East, the volume of card payments now reaches up to 90%.

The next stage of technological advancement in the financial sector is WealthTech.

Once the foundation is laid—that is, when basic financial operations have been digitised for a large number of people—we can move forward to digitise the process of asset management. What global issue affecting roughly a billion people can be addressed by developing WealthTech projects? How about the problem of financial inequality in the world? At first glance, this may seem like an overly ambitious claim, but let's delve deeper.

According to the latest UBS "Global Wealth Report 2024," global wealth is gradually increasing. In 2023, for example, it grew by 4.2% compared to 2022. However, a significant gap remains between the rich and the poor. A large portion of global wealth is concentrated in the hands of just 14 individuals, who collectively own assets worth $2 trillion. People with more than a million dollars in assets make up only 1.5% of the world's adult population. The next tier in UBS's wealth pyramid is the middle class, consisting of people with assets ranging from $100,000 to a million dollars, which accounts for 16.3% of the adult population.

This category is particularly interesting for scaling a "boutique" wealth management business through technology. These individuals face a significant shortage of quality financial services and opportunities to preserve and grow their capital.

What makes wealthy people rich?

A specific mindset, a tolerance for risk, determination, and a short memory for failures—they are willing to take risks repeatedly until they achieve their goals. Additionally, they have access to top-tier tools that help them grow their wealth. They are supported by skilled financial and investment managers who help them seize opportunities, analyse market conditions, and make successful investments. During times of crisis, the rich tend to get richer, while the poor often become poorer and sink further into debt.

I noticed a situation where people with capital below one million dollars are, in essence, overlooked. While this may not be a significant issue for those with less than $100,000, it becomes a pain point for individuals with assets between $250,000 and $500,000. They have enough capital to expect quality service and financial planning, but not enough to afford advisory services at the rates charged by major banks or access to lawyers, financiers, and tax advisors. I refer to these clients as non-wealth management, non-private banking. Technology can indeed help turn this scarcity into abundance.

Today, many digital platforms have been developed to enable investing for people across various wealth levels. What once required $100,000 is now available for $100, even if in a limited format. However, the democratisation of investment processes does not fully address the issue of inequality. It doesn't build a bridge between the lower and middle classes, nor does it pave the way to wealth for them. The challenge isn't just about access to investing; it's about making smart use of that access.

Digital platforms that could genuinely address the needs of the middle class

Digital platforms that could genuinely address the needs of the middle class should offer services like financial planning, tax planning, asset management, private banking, and other financial services, including lifestyle management and high-quality analytics in a user-friendly format. Digitising these services and integrating them into one or several applications would allow clients to track their account movements, manage taxes, and invest, with the option of consulting with an advisor as needed. This could also include face-to-face meetings, which is crucial. Many clients no longer require fancy offices or expensive managers for regular interactions; they are not inclined to visit brokers or investment banks frequently. However, when dealing with substantial sums, such as $500,000 or more, they still prefer occasional in-person meetings or staying connected via Zoom.

A service of this level and scope is not just a matter of developing one or a few technological products. It requires building an ecosystem that brings together various players in the financial market, including large banks, independent advisors, and consultants. Exponential growth is driven by engaging independent teams across different markets, providing them with technological solutions and leveraging cross-selling opportunities from existing client bases. This has been made possible through the evolution of fintech, as bank cards provide a ready foundation for cross-selling. Another factor facilitating projects of this scale is the development of artificial intelligence, capable of analysing massive data sets and making cross-selling more straightforward and well-organised.

Can a single company benefit a billion people?

Unlikely. But it can set the flywheel in motion. Companies like Revolut and Monzo once set this flywheel spinning in the fintech industry. Their innovations have inspired projects worldwide that have made banking services accessible to millions of previously "unbankable" clients.

A similar scenario could unfold in the WealthTech industry—all it takes is for someone to take the lead and help the middle class step out of their conservative comfort zones. They will start using Wealth-as-a-Service solutions, effectively gaining access to services traditionally reserved for multi-millionaires. With this access comes the potential for substantial wealth growth, propelling them into a higher financial league. Following their lead, other groups within the wealth pyramid will also move forward. Gradually, this will create bridges, narrowing the gap between wealth and poverty and contributing to a more equitable society.