There are significant changes occurring across numerous sectors in our industry, with many requiring the development of digital services to make them effective. What is crucial is that as those developments progress we continue to put the consumer’s interests at the centre of the processes, as well as addressing industry costs, efficiencies and risk issues.
A core area for enabling digital services in the industry, and one that I believe will be high on the agenda over the next year, is systems integration. In particular between platforms and adviser back-office and other software providers.
Systems integrations can have meaningful impact on companies’ day-to-day working, providing clear benefits for platforms and adviser back-office systems. They do away with the need for re-keying of information, so reducing errors; data can be passed quickly and seamlessly between them; the process is more secure; they save time and they free up resources, which can then be directed at further improving services for their customers. Moreover, they can have a positive impact on the bottom-line, not only improving the efficiencies and costs for those businesses but also for their clients, the adviser firms.
Not surprisingly, therefore, integration has become a key differentiator for platforms and providers in the advisory market. Ease of use and the ability to quickly access valuations and other information for client reports as an example, form a key part of advisers’ due diligence processes.
Challenges
The current point-to-point approach to integrations certainly have a place between close working trading partners, but as other trading partnerships emerge and evolve, such an approach can be inhibiting.
Each ‘point-to-point’ integration takes substantial time, ties up valuable resource and even when completed, there will be the continued maintenance and compliance issues. This can become an increasing burden as the number of point-to-point connections grows and needs individually maintained and tested when any change is made.
In addition to IT, each and every integration requires other resources including legal, compliance and marketing – all of which will have to be re-engaged should a change arise to an existing integration.
Through a careful balancing act of budget and resource availability, companies will naturally prioritise those integrations which are going to provide the greatest return on investment. Every business case has to be argued in terms of benefits such as having the right customer profile, market reach or assets under management, for example.
Companies who do not have this leverage or perhaps are smaller or are new entrants to the market, can find they are further down the priority list, and that can mean at best months, possibly years, before they are considered as an integration partner. This can impact their efficiencies and customer service and so hinder their ability to grow their business.
And, of course, every business case that is not won creates gaps in coverage– meaning for advice firms, they may have one automated process with one platform/provider and a manual process for another.
What’s the answer?
The best ideas are often the simplest. By putting a hub in the middle, platforms and back-office systems can inter-connect once without having to integrate to each and every counter-party. Integrations are easier and faster, costs can be reduced by lowering time and resource overheads for platforms and software providers.
As the industry’s not-for-profit Fintech company, Origo has been working collaboratively with 45 organisations in developing what has become the Integration Hub.
The Integration Hub maintains the required standards and connections, and all a company has to do is undertake a single integration and maintain that link to potentially do business with any and all other users on the Hub. Regardless of data formats or supported versions, the Hub ensures each party receives information in an acceptable format. Integrations through the Hub remain compliant and perform at top speed, considerably reducing project and testing overheads.
From an FCA perspective, the Hub also helps engender competition, providing the potential for smaller providers, as well as new entrants, to more quickly, easily and cost effectively connect with other users. This increases industry connectivity while also opening up trading opportunities.
The Integration Hub also enables financial advisers to have greater access to automated services across a widening range of platforms and systems. This makes for more efficient operations within advice firms – reducing resource and IT costs and enabling better availability of data and information. In addition, it allows advisers to more easily offer their clients access to their data through portals, further enhancing the client experience and the adviser/client relationship.
Developed with a range of industry participants, the Integration Hub makes it simpler, easier and faster for any platform to connect to any software provider and vice versa – and as the user base continues to grow, it creates more comprehensive connectivity for the whole market. The Integration Hub adds value for platforms and software providers, it improves the working environment and service delivery of financial advisers, and most importantly, it helps deliver a better experience for the end client too.