Platforum’s recent survey reveals the highest percentage of advisers (17%) cited ‘integration between systems’ as the most significant challenge over other reasons including provider processes (13%), staff training (11%) and security issues (10%).
While many platforms are responding to adviser demand for more integrations, the research shows that currently they are focussed on two core groups: back-office systems and digital tool suppliers (risk profiling, fund research, cashflow modelling, etc). These integrations only occur where there is a clear business case with sufficient adviser demand or volumes of business - and are mostly developed on a point-to-point basis, i.e. one-to-one connections. The research also found that such point-to-point integration approaches tie-up technical teams, have protracted legal and commercial processes and are more likely to be expensive to build and maintain.
Anthony Rafferty, Managing Director of Origo, says: “There is an increasing need within the advisory market to automate processes and use digital solutions, to help create greater efficiencies, deliver an improved service to clients, and to meet clients’ digital expectations across the board.
“Systems integrations serve our industry by reducing costs and delivering data quickly and securely. Hence, rather than just being a “nice to have”, they have become the expected norm for the adviser.
“The current major technological upgrades, or re-platforming exercises, occurring as platforms look to keep pace with technological change – combined with increased sensitivity around client data as a result of MiFID II and GDPR – also have thrown systems integration into the spotlight, as advisers attempt to keep their clients’ information up-to-date amidst the upheaval.
“And the need for speedy, secure connectivity will only increase as the Open Banking and Pensions Dashboard initiatives progress and new entrants join the ranks of the adviser fintech firms with different ways of working.
“There is no doubt that now is the time for the industry to review how it approaches integrations. Multiple bespoke, point-to-point integrations increase risks, costs and complexities for the industry. There is a need for simplification.
“The focus should be on making integrations more efficient, sustainable, less sporadic and more wide-spread - ultimately delivering improved outcomes for the consumers.”
Miranda Seath, Research Director of Platforum, says: “Alongside the need for better and simpler integration, platforms must look at future-proofing their businesses: a flexible approach to integrations helps to keep pace with evolving technology and adviser business practices.
“For platforms it is very much an immediate priority that systems integrations should generate maximum value for adviser businesses and, ultimately, the client. In an increasingly connected world, now is a good time for platforms to review their integration strategy.”
Origo is publishing the research in a White Paper A Connected World: The future of platform integrations which can be downloaded here.
The White Paper shows:
• The third-party tech suppliers with which the platforms are currently integrating.
• How platforms are achieving integration.
• Platforms’ future integration plans and the challenges they face.
• The future of integrations in an increasingly connected world, and how platform integrations will evolve.