Transcript

Julia: Hello, my name is Julia Streets, and welcome to the podcast series StreetsTalksTo. In each episode, I interview leaders from some of the most influential firms, bodies and initiatives in the financial services industry. We explore what’s at the very forefront of innovation and change, and we think about the challenges facing firms and the industry at large. And we uncover the opportunities that exist both today and as we look ahead right now, every client, every firm is trying to achieve two things, growth and/or transformation. As a business, we help firms with three key offerings, campaigns, content and coaching, because we never forget the human in the mix. We hope you enjoy the series, which you can find on all good podcast channels. And all the episodes are listed on our website, streetsconsulting.com. You could find these also on social media using the hashtag #StreetsTalksTo.

Thank you for listening and welcome to StreetsTalksTo WealthOS.

Before I welcome the guest, let me just tell you a little bit about WealthOS. It is the operating system for digital wealth management. To explain, it offers a cloud-native modular operating system for digital wealth management products, and it’s born from its founders frustrations over the inflexibility of legacy wealth management infrastructure. Any wealth management firm with ambitions to digitalise their operations, improve efficiency or to offer innovative products and services has ultimately been hampered by legacy infrastructures. But that’s where WealthOS comes in and it has a crystal clear mission to build the digital infrastructure that enables equitable access to wealth management services for everyone right across the globe. And today, I’m delighted to be joined by the Founder and CEO, Anton Padmasiri and Chief Commercial Officer Sri Krishnansen. Welcome, Anton, great to have you on the show.

Anton: It’s great to be here, Julia. Thank you for having us.

Julia: Well, thank you for taking the time and Shri, wonderful to see you. Thanks for being with us.

Shri: Thank you, I’m enjoying this.

Julia: I mentioned in my opening remarks that this is all about welcoming innovators onto the show. And we know that the wealth management industry is a FinTech segment, clearly ripe for innovation. We’ve been very proud to support your launch and I’m really keen to hear about what you’re doing because you are the first ever cloud native solution, so that self-invested personal pension providers complete their digital transformation. But before we get into that, Anton, tell us a story. Talk to us about the business. Take us back a little, where did it all begin? And also I’d love to get a sense of your milestones and your successes to date.

Anton: As you mentioned at the top of your introduction, WealthOS was founded on the back of a lot of frustrations that I felt building retirement products for brands like Fidelity, the infrastructure solutions that were available for us to build customer experiences were quite analog, built for a time when people used send the paper application form into office rather than do something on their tablet or their mobile phone. And part of the problem was that technology infrastructure, that legacy infrastructure meant that good customer experiences couldn’t be brought to market. Back in 2020, inside of the pandemic, my co-founder and I decided to embark on this journey to build a modern operating system, a modern cloud native operating system, taking inspiration from sister sectors like banking and insurance, who had moved the infrastructure to make it a lot more digitally friendly. And we’ve been building this platform, this product since then, we’ve so far raised about £5.5million in total.

Most recently we did our institutional fundraise first institutional fundraise, which was backed and led by Barclays, that demonstrates that the market is crying out for a solution like this. Because in FinTech, especially in financial services, wealth management tends to be a laggard in adopting modern technology and the investment shows that the market is hungry for a new solution to bring the best of breed experiences to market. Most recently, we’ve also signed a deal with our first large migration client. We will be migrating about a billion pounds worth of assets onto the WealthOS platform and about 200,000 accounts including self-invested personal pensions, and a market leading digital drawdown product. We are really pleased with the progress that we’ve made and we are intent on continuing on this growth and providing a modern solution for wealth managers, pension providers, and the like.

Julia: It’s a wonderful way to start the show because you’ve painted a great picture of the needs, the frustration, the evidence of how you got started, but also the fact that you are attracting not only investment, but also clients. Ultimately, I guess the acid test is AUM bringing that over, which is phenomenal. So Shri let me pick up on a remark that Anton was making and I also alluded to about the wealth management industry being slightly behind the curve, is it fair to say that? When you are talking to clients, paint us a bit of a picture about what prompts them to work with you. You’ve got your clients on, obviously AUM is flowing. Talk to us about some of the dynamics from a client’s point of view.

Shri: Julia, you are absolutely right and so as Anton earlier. Wealth management is the last bastion of financial services to be digitalised. We are behind insurance, we are behind the banking sector as well. The reason for that is because it’s long been seen as like an elite service for just a few. There wasn’t that big opportunity and it was all about leather-bound portfolios and meetings in oak-panelled boardrooms. That’s no longer the way. There is a hundred trillion dollars of wealth about to transfer from baby boomers to millennials and Gen Z.

These investors don’t want to interact that way. They want to interact digitally, they want a different level of service, they want different products. The only way for wealth managers to capture that and to grow their offering is to start scaling to cater for that demand. In terms of the clients that we work with and the clients who we would love to work with are the providers, financial institutions that offer general investment accounts, individual savings accounts, digital retirement accounts like personal pensions, all the way through to third party administrators and business process outsourcers.That means we look at the whole gambit of financial institutions from private banks, retail banks, FinTechs, all the way through to your high street banks as well.

Julia: I’d love to pick up on this question about this SIP offering that you have. Anton, can I bring you in here because just focusing on that one which you just recently launched, I’d be curious to know about why you started with SIP providers and do they have a need that’s more urgent in your ultimate quest to tackle the wealth tech challenge?

Anton: That’s a great question, Julia. In terms of retirement savings, this is a really important part of a person’s overall wealth. If you think about a person, there’s their house, but after that, the largest part of their wealth is going to be their retirement pot. They might work in a number of places, pensions will start getting built up. And if you think about the macroeconomic trend, a lot of us are in what we call defined contribution pensions in the industry, which is basically a jargon to say when you retire, you’re going to get a pot of money. Now figure out how to use that pot of money to survive and do all of the things for the rest of the 40 years. We are going to be an ageing population, dropping birth rates. I’m not sure that the taxes are going to be able to fund people’s retirement.

So why SIPs is because I think there is, as I said, there’s a lack of attention paid to the experience element of retirement, because retirement savings is a journey. Retirement planning is a journey from the point you start your first job all the way, it is a journey. And the right experience is hugely important to educate people, to allow them to understand what kind of a lifestyle they’re looking for, what kind of a lifestyle they should aspire to and allow them, give them the tools to save towards a comfortable retirement. When you combine that need and with the very old technology that I mentioned in my previous answer, that is powering the retirement experience. And third, if you think about the growth opportunity that this presents, I think it was the perfect entry point for us because I think there was a burning need in the market for this type of technology so that the right kind of proposition can be built and serviced.

Because if you think about it, many people don’t have financial advisors, they manage their own finances. So the right experience, the right information is so important for them to be able to save towards their retirement and when they get to retirement to give them the toolkit to manage their finances in a better way. So having the right infrastructure technology I think was a no-brainer for us. And obviously, this is personal to me as well, having built pension products in my previous lives and being frustrated, not being able to build the right experience because technology held me back, this was a perfect moment for me to influence that and say, “Hey, there’s a huge market.” It’s being born out, we are hearing from the market this crying need.

We are having so many conversations where people are excited about the technology that we are offering so that they can offer amazing retirement experiences to their customers. And as I said, it’s a huge growth opportunity. About £500 billion worth of assets are sitting, which is likely to go to about £750 billion. So it’s a great opportunity for people to capitalise on, or organisations to capitalise.

Julia: You’ve talked very much from the point of view of not only the provider, but also from the end investor, the person on the street, the you and me who are all on our financial journey from the day we start working to the day that we retire and how we manage our money beyond. Shri, can I bring you in here because I’d love to get your thoughts about, there are dynamics at play in the market. There have been, well, reforms that have even been mooted and come to market as well. Talk to us about the end investor’s point of view and why all this stuff really deeply matters.

Shri: In fact, that’s actually why we exist. We are entirely guided by how can we improve the experience for customers. As Anton alluded to, he’s an industry practitioner, so am I, and so many of us at WealthOS, we have come from the side of trying to build digital wealth management products that can be used and experienced well by customers. But we struggle because the technology wasn’t there. So what we’ve done is we’ve looked at what are the jobs to be done by customers? What is it they want from these products? And let’s build the digital infrastructure to enable that. What it means for the end investor is, if things go well and everyone’s adopting our technology, it’s going to lead to much better customer experiences in how they interact with digital wealth management products. It’s going to lead to lower operating costs for providers so they can offer more competitive pricing.

That’s much more money in the wallet for the customer. It’s also going to mean that they can expand their services to a wider sector of the market that they don’t currently cater for. Everything from the mass affluent to even the mass market. I’m hugely passionate about that because that means that more people who need help, who need access to these products are going to be able to get that access. And of course, Anton mentioned retirement, that’s going to be the biggest asset for most people in their lives and it’s what’s 2024 almost just over a decade ago, 19th of March, 2014 I think was when the Chancellor announced pension freedoms, which was the ability that you can take your retirement savings and do what you want.

That announcement was 10 years ago. Where are we now? The products aren’t there to support that announcement. Legally there’s a freedom to take your retirement savings and spend it any which way you want to, but the products don’t give you that flexibility. So what I’m really excited about with our digital SIP technology is that you will be able to access your retirement savings and plan and manage your retirement the way that you want to.

Julia: Let’s talk about it from the point of view of the provider because given that backdrop and given the end investor’s appetite and actually right to have access to digital products in order to take control of their future and their wealth, there’s also the question about that, those who provide, and it strikes me that there’s a phenomenal opportunity to out compete, which is a big driver when you’re talking to your clients as well. Anton, how do you talk to clients and what are some of those inefficiencies that can just be addressed very, very quickly in order to out compete?

Anton: The way we’ve approached it is that the way we talk to our providers is we’ve built experienced led infrastructure. What we’ve said is you as a pension provider, you as a provider must focus on your customer’s need the experience side of it and think about the journey they’re going to take. It shouldn’t be transactional, it should be experiential. People don’t come to you because they want to open an account or they want to add some money. They come to you hoping that they’ll be educated, they’ll be helped and guided along their retirement savings and retirement income journey. And what we say is we’ve built the infrastructure for you to really hyper focus on that. 

We are fully cloud native, which means you don’t have to do regression testing, you don’t have to worry about putting servers under your office, you don’t have to worry about scaling and so on and so forth.

We provide fully comprehensive capability, everything from managing accounts, all of the tax rules, all of the connectivity to HMRC. We provide end-to-end capabilities for you to run your pension. You don’t have to bring different software and patch them together. You’ve got a single place that you can do everything that you need to do to run a pension. We also provide everything as APIs. What does this mean? Everyone talks about API. What this means is going back to that experience, we talked about your ability to really visualise what a good customer experience is and build the digital journeys and connect them. These APIs allows you to connect them without having to do a lot of engineering and a lot of development work. What that means is you can get products out to market faster, and as your customers talk to you, you can change that experience, refine that experience, improve that experience.

And also our APIs allows you to work with data in a really clever way because data is so important to understand your customer and service them in a hyper-personalised way. That’s what we’ve done, and when we say we are a digital native cloud native infrastructure, what we’ve thought about it is the customers needs to be serviced irrespective of the channel they come from for you to have a good understanding of their needs and how to service them. That’s what we bring and we’ve automated everything. We basically enable you to run your proposition at scale without having to increase your cost base as well. And automation is not just about reducing costs, it’s also about customer experience if something can be done quickly. So if Mrs. Jones wants to get their money out, that automation allows you to get that money out to them when they need it, not 10 days later. That’s what we’ve done,, and I think that is a really market-changing solution.

Julia: Because one end, it’s about access and also wanting the transferability as well, the ability to change and to make the decisions and switch with efficiency, but also your point about scale, but without increasing operating costs and really deriving those scale efficiencies that exist as well. But of course, the world never sits still. You talked, Shri, earlier about the pension reforms and then also we’ve got consumer duty coming as well. What next, I suppose, is my question? What are you thinking about next? What’s the market talking to you about next?

Shri: I mean, you’re quite right. The world doesn’t sit still, especially in the world of investments, pensions, and wealth management. There are three key areas that I think are really moving very fast, and that is regulations, evolving customer demand, and just technology itself as a bedrock, right? We’re helping our clients across all three areas because we have been set up and architected in a way that you are always getting the latest software from us directly from the cloud. 

We give updates every two weeks. So if there’s a regulatory update, you get it within two weeks. We are embracing the latest architectural principles in how we have built the platform. So we embrace the latest standards for technology, the latest way of coding. As technology evolves, you can evolve. And when it comes to customer demand, that is literally driving everything we do in the features that we build.

Let’s tackle some of these challenges with a little bit more granularity. Regulations, Oh my gosh, is this industry overregulated! But it has to be because this is protecting people’s life savings. So we know consumer duty was a big focus of last year, but we have so much more coming our way within SIPs. We have the need for default options with life styling. We have the idea of a one-pension pot for life. Our technology already supports these. As soon as these initiatives are widespread, we’re ready. And we have new products coming to market as well. The chancellor announced the UK ISO if it ever lives to see the light of day. That’s a new product. When we have the pension dashboard. Now that’s a piece of policy, but it also is a lot of market infrastructure to get pension providers to connect to a central database to make it easy for users to find where their pensions are.

That’s a huge tech hurdle. Regulations are fast and coming and actually in this year alone, there’ve been six dear CEO letters. These are those letters written by the FCA to CEOs of wealth managers and critical infrastructure providers saying, “What are you doing?” And two days ago, I kid you not, there was one letter on the retirement income market, questioning, are there good practices there? And if you use our technology, there will be. I’ll just drop that plug in there. But on a more serious note, the other challenges coming, wealth managers ways are consumer demand. Consumers want better. They want to interact with products the way that they do with other things in their life. Amazon and Netflix have set the tone for how we interact digitally. Snapchat too, TikTok as well. How does this work for wealth management? Well, if I have to go and fill in a paper form, I’m not going to want to use your product.

Consumer demand is evolving fast and you need the technology to be able to offer the experiences that cater to that. And finally, technology is evolving. I was at a conference this week and I could not tell you how many times GenAI was mentioned, I would be rich for every penny of that. The industry is talking about GenAI, is talking about Web3 and all of that. But if you don’t have the right technology to connect to it, you can have all the fancy generative AI front end, but without the backend to support it, you’ve got nothing. And if your data is split across different systems on spreadsheets and etc, how are you going to train that generative AI? Garbage in, garbage out, and people are finding that with generative AI already. So technology’s evolving and that’s going to be a huge challenge. You need something strong, a strong core to support your body, a strong core to support your tech.

Julia: Love that. And also that refers back to Anton’s earlier remarks about the APIs and the importance of being able to ingest the data but also govern the data and then have that as a base rock upon which to apply all these technologies above. Now we’ve talked there about the UK and to all our UK listeners, I’m sure they’ve probably learned quite a bit from this podcast, but will be thinking about an extraordinary amount on their plates. But let’s look a little further afield because I referred to your mission at the top of the show. And Anton, let me bring you in here because you have a very clear international ambition, if I could say that. What could we anticipate for the future of WealthOS?

Anton: It’s a great question. Some of the macroeconomic trends I mentioned earlier, like an ageing society, people living longer, dropping birth rates, and then the movement towards what we call in the industry defined contribution pension where you get a pot of money and figuring out how to live off of that for the rest of your life. That is not just UK specific. That’s happening across the world in Europe, in the United States, in Asia, everywhere this is happening. So what we’ve definitely anticipated going across the UK, while UK is our entry market, we’ve got ambitions to help other countries, organisations in other countries build great customer experiences as well. 

For example, in Europe there is an initiative called the Pan-European Personal Pension, where they’re trying to build a single product that can be accessed by all Europeans. There are concepts like POT Follows member, which says, “Ignore the employer. Make sure you think about pension savings, retirement savings from the investor and the saver’s point of view, and let them carry that through wherever they work, whatever they do.”

What we’ve built is, what we’ve done from our end is while we are building the infrastructure currently for the UK market with the SIP, we’ve architected in a way that we can easily port it to other countries. So if you went into Ireland and you set up our platform, you will inherit the rules for a PRSA, which is the equivalent of a SIP in Ireland. Or if you went to Canada, you will be able to set up an RRSP, which is the equivalent in Canada for a SIP. And like that, we built this international layer enabling us to go and help organisations in other jurisdictions as well.

If you go back to our mission statement, we want to provide equitable access to wealth. And that is such an important mission for us. People should be allowed to build wealth because that is ultimately the pathway to freedom and financial independence and providing that infrastructure is a real mission for us. So what we want to do is in the near future, we will be looking at what other markets we are going to enter, but clearly we have international ambitions to go and help other countries, other providers, and ultimately, end investors have a better retirement experience throughout their journey.

Julia: I can’t think of a better way to close out the show. And if you think about it in a really short period of time, we’ve explored not only your history and where the business was born from, we’ve talked about your early traction. We’ve talked about some of the dynamics that play from the perspective of regulation, providers, but also ultimately, the end investor. And we’ve really thought about the roads to digitalisation, removing and addressing some of that legacy, bringing in technology, you bringing in careful consideration about user experience, the role of APIs and how that can unlock and empower how WealthOS is going to help the industry, but also your global ambition as well.

Gentlemen, it’s been a pleasure to have you both on the show. Shri, let me come to you first. Thank you for your time.

Shri: Thank you so much. It’s been a pleasure chatting.

Julia: I hope you’ve enjoyed the conversation. And Anton, thank you for all your thoughts.

Anton: Thank you, Julia. It was a lot of fun talking to you and exploring some of the topics. As you can see, we are very passionate about it, so I thank you for having us on your show.

Julia: Well, that comes through loudly and clearly, and let me just tell the audience how to find you. On the website, it’s WealthOS.cloud And of course, you’ll find them on LinkedIn and all good social media channels. It’s been a fantastic conversation. And to all our listeners, this has been StreetsTalksTo WealthOS. Thank you for listening. Until next time, goodbye.

This episode of StreetsTalksTo was produced by Podshop on behalf of Streets Consulting Limited. At Streets Consulting, we are a strategic business development, marketing and communications consultancy focused on helping financial services and technology clients around the UK and around the world. Every client is focused on growth and/or transformation. And as FinTech PR specialists, we are there to help them every step of the way. And we do this through strategic campaigns, compelling content and impactful coaching. We never forget the human in the mix. So you can find this episode on StreetsConsulting.com and using the hashtag #StreetsTalksTo and we can also be found on LinkedIn, YouTube and X at StreetsConsult. Thanks for listening.