TrustQuay has today announced the release of its latest Future Focus Report, which reveals that while firms believe that digitalisation, automation and innovation should make them more competitive and more valuable, it appears that the industry is struggling to move forward to reap the benefits.
In a global survey of 100 wealth managers, private banks, family offices, corporate services providers, trust and alternative fund administrators, the survey found that on average firms only score themselves a modest 5 out of 10 in terms of how digitalised they are currently, indicating that the industry knows it still has a long way to go on its digitalisation journey.
When asked to compare the sector to other areas of financial services, 92% of respondents say that technological innovation in the industry needs to accelerate, with half acknowledging it currently lags behind in terms of its investment in technology.
A key catalyst that is driving forward the digitalisation of the corporate services, trust and alternative fund administration industry is the rising expectations of end-clients. The survey found that 8 out of 10 respondents feel their firm could be better at delivering a digital experience for clients, with half of firms planning to digitalise their business models and client engagement in the coming two years.
When it came to belief and behaviour regarding the value of digitalisation, this is where a clear dichotomy emerges. The vast majority of respondents (78%) believe that companies that are digital leaders are, as a result, more competitive and more valuable than their peers. However, only 6% felt their firm was actually a digital leader.
The same dichotomy is true when it comes to attitudes to technology. Nearly all respondents (95%) say that technology should be viewed as an investment in growth, but only a third (32%) say their own firm spends enough on technological innovation.
Commenting on the findings, Keith Hale, Executive Chairman of TrustQuay, comments:
“While there is clear evidence from other sectors that digital leaders deliver significantly higher revenue growth, margins and profitability than digital laggards, there appears to be a dichotomy between belief and behaviour within corporate services, trust and alternative fund administrators.
“Even though nearly all firms believe technology should be viewed as an investment in growth, rather than just a pure cost, only a third of firms feel they are investing the right amount in innovation. More work therefore needs to be done to change attitudes and technology providers need to help firms by providing the tools and capabilities to make a clear assessment of the business case and return on investment for investing in technology.
“Automation and digitalisation inevitably happen sooner or later across all industries. So it seems inevitable that the future leaders in corporate services, trust and alternative fund administration will invest significantly more than is currently the case in digitalisation and automation in the short term, to the reap the medium term benefits as the market rapidly changes.”
Keith is Executive Chairman at TrustQuay