Objectway shared a lively and insightful discussion with senior executives of major Wealth Management and Private Banking firms at a recent forum organised in conjunction with Compeer.
During the presentation some insights were shown from ongoing research on the future priorities for the front office which included the desire for greater functionality and automation in order to enable more effective client management.
Among the most significant results, 50% of firms wanted to be able to manage client preferences and risks in real time, making sure a client’s ESG preferences were being met and their portfolios could be rebalanced in an efficient manner. Over 30% of firms had signalled their intent to use AI to help them tailor portfolios. Over 40% wanted to see more automation.

On the whole, although IT and Ops spend is very inefficient in the industry, the research showed that firms that spend more on IT and Ops per front office professional see a greater average managed revenue per front office professional and greater profit margins. This relationship may become even more pronounced as firms are looking to replace legacy systems with more modular open architecture solutions, particularly at the front end.
The need for improved efficiency was highlighted and many firms were trying to reduce the current – often manual – effort in activities such as onboarding and even in giving clients the ability to enter a change of data via a client portal instead of having to produce a request to the back office and wait for a return.
Firms had made many strides in terms of improving their digital journey during the pandemic and were now driving to integrate disparate systems to try and offer a seamless experience for their clients and Investment managers. For example, having an integrated portal with their Investment management solution and CRM.

Some of the challenges to this were the perceived risk and effort in implementation projects,changing the status quo of a traditionally transactional relationship with IT vendors and moving to a (multiple) partnership approach, but also encouraging open communication and clear sharing of roadmaps between all the parties.
Another challenge was making sure that firms were able to effectively gain buy in from their internal stakeholders i.e., the users. Change is usually unsettling and firms believed that more could be done to articulate the benefits on the proposed change internally. Vendors could also play a greater role in this by offering examples of the impact of change and the challenges faced by peers. Some of the track record of projects in the industry also gave cause for concern in terms of delivery times not being met, and inflating budgets associated with change. Firms wanted more assurance around these areas and again wanted to see a track record of successful implementations and details on what this looks like.

It was also discussed whether it was better to buy or build especially if they wanted to integrate a separate ‘function’ to an existing system which was tailored to their needs, may provide a competitive edge, and also may be less risky than replacing a whole system. In general the consensus was to buy/adopt a modern scalable solution which had open architecture and could easily lend itself to a best of breed set up and integrate to any builds that could result in a USP.