In our latest Future Focus Report, we found that only one-third of firms in the corporate, trust and fund services sector have started to digitalise their business models and client engagement. Our research showed that many firms’ day-to-day focus remains on business challenges such as regulation, improving data quality, increasing efficiencies and reducing costs.
While it is clear that firms recognise the need to leverage technology in order to transform their businesses, many still appear unsure how to justify the business case, calculate the likely return on investment or execute a digitalisation programme.
To guide firms on the direction of travel and best practice to solve these issues, we have created a digitalisation pathway which breaks down the business challenges facing firms into four separate steps:
What we describe here is very much a pathway, in that you can travel down it in whatever way works for your business. That might mean you have elements of stage four in play as you start to tackle stage one. You might decide to tackle stages two and three together.
It would be wrong to think that you can’t think about 'automate' until you’ve been through ‘consolidate’. But our research shows that mapping out digitalisation as a journey makes it a far less onerous, far less nebulous concept for businesses, meaning that action plans can be more realistic and benefits realised far quicker.
We hope that by mapping out the route, firms will gain greater clarity and confidence on the required steps on the journey and the benefits that can be delivered at each stage.
At the core of trust, corporate and fund services business models is data and therefore improving data quality is the very first step that firms should address by consolidating data and systems onto a common digital platform. By taking this first step, the value of data can then be extracted, opening up the opportunity for firms to accelerate progress along their digitalisation pathway.
The rising tide of regulation since the global financial crisis, alongside demands for greater transparency, has constantly increased the regulatory and compliance activities of firms. The second step on the pathway is therefore executing regulatory obligations quicker and easier by putting in place a single global platform for compliance.
The third step is increasing efficiencies and reducing costs by automating key compliance, regulatory and operational processes to increase efficiencies and reduce costs. Growing margins is the raison d'être for any business but ironically in the trust, corporate and fund services world, the technology is already widely available. The real issue is that firms just need to make full use of it.
The final step on the digitalisation pathway is creating competitive advantage and driving growth via a clearly differentiated proposition for clients. The intergenerational transfer of wealth is now moving to ‘digital native’ generations who expect the technology, speed of response, engagement and client service they are already experiencing elsewhere.
Ian Peel is Head of Marketing at TrustQuay.