These were some of the key themes discussed by Objectway with board members of over 40 Wealth Management and Private Banking firms via a series of face to face meetings at the recent Richmond Financial Industry forum, Interlaken, Switzerland.
Digitalisation has to be flexible
The traditional ‘One size fits all’ approach has meant that firms have been unable to quickly pick and choose functionality which is best suited to them. As result many firms do not have a modular approach to their technology stack and feel that they are missing out on value. For example, many firms are looking to add a best of breed solution for engaging with clients in a digital manner, such as improving/changing their client portal, improving the onboarding experience. The front office want a more modern Portfolio Management solution in order to maximise their productivity and add automation so that less time is spent on administrative tasks. Firms also want it to be easy to be able to facilitate their clients to trade new products such as cryptocurrencies. With the current state of this, heavy, infrastructure, change takes time, is costly and the result may not necessarily be market leading.
However, modern IT architecture allows for flexible modular solutions to be integrated to existing systems. These modules are specific and should have an edge versus a general monolithic system. Upgrades and added functionalities should also be provided at greater speed and the risk and cost of implementation is also greatly reduced.
Firms were very interested in this approach and can see the benefits it will have on client experience, advisor productivity and the lower risk of the change project.
Firms need to reduce costs as one way to drive efficiency:
Many firms are struggling with legacy systems which are interconnected via complicated patches. This ultimately causes great inefficiency in processes as well as compromises the integrity of data. The cost of ‘keeping the lights on’ often sucks up significant resources in order to cope with the complexity. Indeed the negative correlation between IT spend and profitability is one that firms are trying to overcome as they strive for greater efficiency and scale.
How can firms reduce costs?
One way is through automating manual processes. Identifying the areas where processes can and should be automated is a good start and may lead to a change in the process itself, i.e. eliminating duplication, by introducing automation tools such as RPA. This should have the impact of freeing up employee time for more value added/revenue generation tasks. In parallel or as an alternative, firms should also look to simplify their IT architecture. This will involve changing to more modern modular solutions as mentioned above. The outcome should lead to many legacy systems being made redundant as well as the high cost and manual processes associated with them.
There was a definite appetite to make the necessary changes to enable flexibility and reduce costs. Firms were looking for the ideal partner(s) to ensure successful change projects in the near future.