The industry is divided by those who utilise digital technology and those who do not, heard attendees of Compeer’s ‘The Front Office of the Future’ conference yesterday (18/05/2017).
Research by both Compeer and IRESS was conducted amongst chief level/senior front office staff at private banks, wealth managers and private client investment managers with £176 billion in assets under management collectively. This equates to 26 percent of total assets held by wealth managers.
As presented by Compeer analyst Sarah Hyams, it was found that 51 percent of firms believe technology developments have been the most important development to their front office in the past five years. Compliance and governance was thought by 14 percent of firms to be most important, while seven percent believed it to be front office structure, integrating systems as a result of a merger and the introduction of new services.
All firms interviewed gave examples of current inefficiencies that could hinder growth plans, with answers varying from technology, compliance and reward structures to automation and paper-based processes. Of the changes to the front office firms would most like to see over the next five year period, greater use of technology came out on top (47 percent), followed by more automation and greater efficiency (both 40 percent). Ms Hyams noted that these results suggested that “the front office of the future is clearly a technological one”.
Furthermore, firms were relatively optimistic that these changes to the front office will occur, with 64 percent believing all of the changes will happen, 29 percent believing some will happen, and seven percent unsure. Another change, which 92 percent of firms are hoping to introduce in the future, is bringing additional channels or functionality to their front office. Currently, view only client portals are the most popularly used channel (56 percent), followed by mobile access (18 percent). Investment portals, client portals, and just phone calls and emails are channels each used by nine percent of firms.
Ms Hyams concluded that technology has certainly been the “most important development over the last five years” and will be “the basis of change over the next five”. There are “lots of opportunities to improve digital offerings”, and reminded attendees that technology is the key to "bolstering" front office productivity.
The Front Office of the Future conference was held in Fishmongers’ Hall in London on 18 May 2017, and hosted by Compeer.