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December 19, 2019
Successful Wealth Management Firms Don’t Stand Still
Successful Wealth Management Firms Don’t Stand Still
Digital Banking

As we enter the new year, 2020, I’ve been thinking back on my own past 20 years working at CREALOGIX, and what I’ve seen about the ingredients for commercial success among our wealth management and investment management clients. Some of our current clients have been working with us for over a decade, some of them two decades. Looking at the healthy and long-standing firms in the wealth management industry, I think there are a number of interesting business strengths they demonstrate.

First of all, the way we worked with our customers 10 or 20 years ago is not the same as our current approach. Of course, the technology and products everyone works with have changed enormously, but the pace of development has accelerated massively. 20 years ago, IT projects in wealth management firms were big complex affairs which needed to be planned and managed extremely cautiously. The unfamiliar areas of technology meant involving external consultants, supervising with steering committees, and defining scope in a rigid waterfall approach.


There is no way this kind of rigid approach would be acceptable today, and indeed the thriving firms that we work with have embraced a much more agile approach to software development, and a faster, more iterative strategy with regard to their technology overall.

The successful firms of today seek the best quality in their software, but they also recognise that a key factor in achieving this is to be able to change or swap out the many different parts of their systems. When it comes to technology, embracing change is a key strength, as opposed to resisting change.

Another example of agility that I’ve seen among digitally confident financial services firms is the ability to try out ideas in a low-cost, “minimum viable product” approach, and learn quickly from early experience, including the ability to accept failure. It’s always a good sign where the leadership in a financial institution take active decisions around software innovation, even to the point of being willing to experiment with less proven ideas.

Orchestrating the best available software

This brings me on to the second major success characteristic, which is the ability to take advantage of best of breed solutions and achieve an overall control of the mix, or “stack”, of technology solutions. This is in stark contrast to the old-fashioned ways of expecting to build new systems from scratch. The old approach was to design large monolithic solutions, which even bound hardware requirements closely to production software systems. Changing these systems was slow and costly, and any significant change to a new technology or new technology provider would mean starting the entire process again.

Furthermore, in the early days, despite all the strict advanced planning, financial services firms outsourcing their software development typically found that timescales drifted much longer than expected, compromises constantly had to be made in functionality, and the end result of projects was often different to what was originally envisaged.

In the present, the level of risk in software projects is now significantly less because there are so many tried and tested products which are ready to use, and a bigger solution can be composed of different interchangeable pieces under the surface. In many cases, these are niche solutions designed by specialised fintechs, and so the ability to integrate various different pieces of a solution into a working system is also a highly important success factor. The most successful firms I’ve seen are ones which can quickly and flexibly take advantage of a variety of new products in this way.

Our own solutions at CREALOGIX have evolved to be standard products, meaning new clients coming on board can get up to speed more quickly and cheaply, with lower complexity and risk, and existing clients can extend and customise the software in a modular way, including integrating data and functionality from any third party systems. Every one of our customers’ solutions is in one sense standardised in terms of the products we provide, but in the bigger picture unique because of how they have composed a distinct overall digital operating model.

Digital differentiation

A third major success theme in digital wealth management is the ability to use technology as a differentiator. Modern investors, particularly younger generations, are increasingly interacting with the wealth management firm through digital channels. Therefore, the quality of the digital user experience is not merely a sideshow, but in fact the key source of brand identity and satisfaction from the customer’s point of view. It’s increasingly hard to say you are a leading financial brand unless your digital experience – and this especially means mobile design and usability – are also market leading.

The wealth management firms which find it easiest to achieve this digital quality differentiation are not the ones obsessing over the technology and IT per se, but the ones who have a clear sense of their unique value proposition as a whole, and then put technology to work in the service of that vision.

In turn, firms with a strong sense of their technology strategy – in this sense of how knowing how technology contributes to the overall business mission – are better able to seek out and work with partners. As a wealth management firm, if you engage a supplier that knows your business and understands the pressures you face, you are far more likely to get the solutions you need, faster and with lower costs and risk.

Keep listening, never stop improving

This is our own strategy at CREALOGIX as we enter a new decade. We value our long-term relationships with our clients as a matter of business partnerships. By encouraging a view of the relationship as being players on the same side, we can more fully understand the business needs of our clients, and align on common goals and objectives.

When it comes to the modern need for agility, partners who work closely together are far better able to collaborate and act in a flexible way, often with multiple technology stakeholders. This collaborative, partnership-based approach represents a significant change versus an old-fashioned unilateral view of “IT outsourcing”.

The key requirement for our own success as a software provider is to be able to listen to our clients and understand what they are trying to achieve for their business and ultimately their end users, the investors and the relationship managers in the front office. This is my final example of a source of strength for wealth management firms that I’ve worked with: some firms are extremely good at benefiting from their customer-focused, relationship-based business model and learning from what customers want.

This is a traditional wealth management business value but also something which helps these firms evolve successfully into the future. The world is changing very fast, and so are the needs and expectations of wealth management clients. The best way to stay current and build a competitive service over years and decades is to keep listening, keep evolving, and keep improving technology, and never stop!

CREALOGIX provides wealth management firms with a market-leading digital engagement platform to keep existing clients loyal, and attract new business from demanding digital investors. Find out more about CREALOGIX Invest.

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