Online Investment Platforms Threaten Traditional Businesses – Report

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Online platforms offering wealth management services are democratizing investment opportunities for a large group of investors and are beginning to threaten the market dominance of traditional players, according to a report by Boston Consulting Group.

According to the company, these digital wealth managers are democratizing investment opportunities for a large group of investors, automating operations, providing customizable discretionary mandates at scale, using hybrid models for investment advice and creating teams who use data for customer acquisition and offer exposure to cryptocurrencies that helps them outpace traditional players.

The report titled, Global Wealth 2022: Standing Still Is Not an Option,” said digital wealth managers attracted $14.5 billion in funding in 2021, or 11% of total global investment.

Principal, BCG Lagos, Phillipa Osakwe-Okoye, said: “As a new generation of technology-focused investment firms offering dollar-denominated investments to a wider group of investors emerges in Nigeria, managers Traditional wealth firms can better leverage evolving trends in private equity, digital wealth and crypto to embrace a digital service model and be more competitive.

“Sustainable wealth creation is possible, and an attractive proposition as demonstrated by the growing number of fintech companies in Nigeria and the growing scale of investment they attract and manage. Nigerian fintech firms raised $800 million in 2021, boosting the valuation of some of these fast-growing start-ups and turning them into unicorns amid local and global economic headwinds.

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