Breakfast Briefing Report: Efficiency Gains From Fintech Are Real, But Be Patient

Tom Burroughes

31 May 2016

The efficiency gains from IT developments in wealth management firms are real but they are unlikely to be immediate, and will not always be as great as sometimes hoped, a Breakfast Briefing heard recently.

“If I were setting out from scratch today as an owner of a wealth management business I would be opting for one provider of fully outsourced technology,” Glenn Murphy, of London & Capital, told the briefing, organised by the publisher of this news organisation and sponsored by ERI Bancaire, the financial technology firm.

“The control of costs lends itself to improving an existing system and enhancing it to the maximum. With innovation though, there is an element where cost doesn’t always mix well with 'best of breed’,” he told the briefing. The event was called “Operational Efficiency Gains and Cost Savings – where’s the lowest hanging fruit in terms of technology?” It was held at the Carlton Club, St James’s Street, London.

Speakers on the panel, which was chaired by Stephen Harris, chief executive and publisher of WealthBriefing, were Andrew Benson, director of IT, Bordier UK; David Harris, senior executive advisor, CEB; Gillian King, formerly head of strategy and change at Duncan Lawrie; Glenn Murphy, chief information officer, London & Capital; and Mark Hatton, director, consulting practice, at PricewaterhouseCoopers.

Kicking off the discussion, WealthBriefing’s Harris asked what sort of efficiency savings can IT deliver? Bordier’s Benson replied: “It can be hard to achieve immediate cost savings...what we do is that we take a phased approach to the delivery of solutions. We previously focused on business processes, such as those that were very manual or time consuming. A lot depends , L&C’s Murphy said: “Having a top layer that collects all data and integrates into a diverse range of applications as a primary source is truly valuable to a business. This can be used for a wide variety of systems and reporting and allows you to be agnostic about the systems you use. In M&A this is particularly advantageous, but also in migrating from one technology to another.”

Finally, the panellists were asked about research stating that, on average, relationship managers devote two hours to preparing a pitch to clients. CEB’s Harris said “he was not surprised” to hear such a figure. “Sometimes, that’s what is required in preparing material for a new client...and sometimes that takes a bit longer.”

He added: “A lot of it does come down to data management and how it is used and retrieved, and looking at the tools and processes provided."

PwC’s Hatton, asked about the purported time-saving benefits of tech, said the merits of saving time were “too simplistic” in evaluating it. “You should not assume that if you free up people’s time, results will increase. Aim at 15-30 per cent productivity improvements – those are the kind of numbers we go after. Often, technological change cannot be done in isolation; it must be business-led and part of a wider change in an organisation,” he said.