Digital human - how to clear your tech debt

Wealth Management and Private Banking

09 June 2022

costDigitalDigital SignaturesInvestmentsTechTechnologyWealth Management and Private BankingWealth Management and Private Banking

Moderator: Carline Burkart, AON Expert: Andrew Back, Multrees


  1. The existing tech debt and the reasons for this can be defined as legacy systems which have aged and are no longer fit for purpose
  2. The digital experience or indeed most technology is always going to be expensive, but worth it in the end
  3. Digital can be a differentiator – many firms state that they differentiate through relationships and services, but if everyone says this, no-one is actually different
  4. The main question is why hasn’t more investment in tech happened when the technology has been available for the last decade or more
  5. Technology makes a difference. Even some digital enhancement will make a business stand out 


Why the sector hasn’t seen more movement towards adopting technology

Firms can’t just swap this out overnight to a new system. Among major global banks, made up of Investment Banking, Asset Management and Private Banking, the latter has been the anchor to consistent valuation, so it’s worth the spend and delegates agreed with this. It is a source of a stable annuity income stream.

The discussion started with the focus on client on-boarding – the process of account opening is often tortuous, still very paper driven and manual. One delegate observed that the industry is paper oriented – clients want to move to digital but IMs and planners lean to paper. The priority is to move to digital framework but firms also have to link into institutional systems and these are still paper based. Surprise was expressed at this.

The US is leading the way to change while it was observed that the Swiss are behind. In Switzerland, a delegate opined, it has been a lack of priority where there has been a focus on increasing regulation, not tech. But now there is demand from bankers for better technology.

The expert demonstrated that 21 years ago, the technology was available. Why hasn’t it been adopted in greater depth, when it is in fact possible to load a new client account via a website and trade the same day?

It’s about knowing the client and understanding what they want – what is best practice around different personalities.

How much acceleration is needed beyond digital signatures?

The responsibility for AML and KYC rests with the IM, so by the time a client gets to onboarding, this search is all done. Online onboarding changes the game. There is no need to re-key information into multiple systems.

With API integration – there is now the ability to get systems to talk to each other so this helps deal with legacy systems. It is better than paper but it could be even better with an integration between the two.

One delegate is replacing legacy systems to move to one CRM system across the business and a ‘single source of truth’ but it always comes back to cost.

It is difficult for small independent firms as it is not a high-volume game and often it is only because a PE owner is there to provide cash. The cost per client is very high compared to retailers. Outsourcing is considered due to rising costs.

Multrees have calculated the cost of out-sourcing and the assessment showed that there were costs for the first 3 years, in the fourth year the business could move to break even and then start to save costs thereafter.

One delegate observed that if all firms custodied with a single firm, everyone is repeating a process to be able to transfer data and surprise was expressed that a bank hasn’t resolved this. A system has been created in the IFA space via hubs where one hub is built to link to everyone. The movement is starting but it needs to accelerate.

In the USA eco-systems have been built and the UK needs to follow suit. Digital can be a differentiator – many firms state that they differentiate through relationships and services, but if everyone says this, no-one is actually different.

Personalisation at scale is required – a lot of firms want to control what gets communicated to clients.  But a core process is needed at the centre – scale comes from this and technology can be leveraged at scale. But there are parts that can be controlled to help a business differentiate, e.g., reporting and communication.

Firms can personalise the RMs engagement with a client. Thinking differently about client reporting in particular, examples were shown of how a report can be differentiated by presenting the information differently to draw the client’s attention to certain points. The narrative helps personalise the message further and differentiate.

The factors holding back digital change

What holds back digital change?  It is good to have the vision but the challenges are time, costs, limitations of users etc. Firms need a vision and need to know how to get there. Transformation is uncomfortable but worth pursuing and sticking with. Very few businesses can replace all the systems at once. Firms need an approach to planning well ahead.

A delegate pointed out the need to engage with everyone in the business, even if it slows things down a bit. Staff want to see change but they also need to grow the business. It’s a lot to ask everyone to do but it will ease their workflow ultimately. There is a hump of work to get over to embed the process.

As another delegate pointed out, digital change is business transformation – multiple layers within the business need to change, a multi-tier architecture is being put in place leading often to a fundamental redesign of the business and that’s very hard. A lot of it is about writing procedures and workflows. And a firm can switch all the tech in, but need it to be adopted and used. Another delegate pointed out you need to be very clear on the journey you are on. Pin up in the office the 6 clear things to achieve and keep checking you are on track.

One delegate got together a development group of very young users - with a remit to challenge anything within the business – every item they found was very useful – it needed prioritising, especially in digital area. The social cohesion was good for young people but they challenged where they saw a log jam – and the process was very beneficial.

As a final point, the expert asked if anyone was extracting data from the business? He knew of one firm that has taken 4 analysts to solely examine internal data – it felt quite revolutionary. Data is the 21st century’s raw material. One delegate gave an example of how CRM is being better used to tailor future events. Dashboards have been developed. But it has taken time and is not perfect. As a final point, a delegate observed that it all comes back to the nature of the wealth business. Everyone is quite idiosyncratic, clients and bankers alike and it comes back to trust.

Key Takeaways:

  • Technology can create extra scale but it needs to break down into smaller steps. You can do several things at once but a high-level plan is needed and the business needs to engage and reward people
  • The term ‘learn fast/fail fast’ should apply, alongside regular testing
  • You need to keep focussed on the process, including the users, from the outset by identifying what you are attempting to solve, e.g., making internal jobs easier, as well as make client experience better
  • Firms are sitting on huge amounts of valuable data about their clients and it is not being used. Delegates agreed they needed more structure around this
  • With shrinking margins and so many pressures on businesses, technology can help drive efficiencies and improve the client experience at the same time.