Technology Challenges in Wealth Management

Ben Revill, Financial Services Business Manager, sat down with Wealth Briefing to discuss M&A, data, millennials, and the future of Xpedition Wealth Management
Following Xpedition’s recent sponsorship of the Wealth Briefing London GDPR Summit, Ben Revill, business manager at Xpedition sat down with Josh O’Neill, Assistant Editor at Wealth Briefing, to talk about the changing dynamics of the wealth management industry, GDPR and Xpedition’s exciting future.

The rise in M&A

‘The global wealth management market is rife with mergers and acquisitions. Rising compliance costs and a swelling number of investors fleeing active management for cheaper, index-tracking funds have created a breeding ground for deals. Asset managers are under pressure to consolidate to boost margins and remain competitive.

Last year saw the union of the UK’s Standard Life and Aberdeen Asset Management, creating Standard Life Aberdeen, the nation’s largest listed fund manager. Old Mutual’s purchase of Quilter Cheviot in 2014 was also prolific. So was DBS’ buyout of Societe Generale’s Asian private bank the same year. In the US, registered independent advisors (RIAs) and small wealth management groups are inking new deals daily.
And it seems this trend will continue in coming years, with many analysts forecasting an uptick in M&A deals, particularly across Europe where the roll of regulatory red tape seems never-ending.

But since most mergers entail extra baggage, such as legacy systems, varying platforms and data vaults, they often make for a bumpy ride as layers of conflicting technology cause gears to grind.

One firm helping money managers iron out marital creases is Xpedition, formerly known as Touchstone CRM. From its offices across Europe and Asia, the technology and consultancy house, in partnership with Microsoft, develops bespoke client relationship management (CRM) systems for wealth management businesses and an array of other sectors. CRM platforms organise and detail interactions between a company’s employees, their clients and prospect clients. For a wealth management organisation, they are the digital backbone.

But what makes Xpedition stand out in this market is its ability to analyse and understand every business’ unique “pain points”, followed up with an efficient and robust implementation process – a stage at which many of its competitors fail, Ben Revill, business manager at Xpedition, tells this publication.

“First and foremost, it is about taking a consultative approach to understanding a firm’s business challenges and implementing a business strategy that will lead it to success,” Revill, who has more than two decades’ experience in data management, said. “A ‘one-size-fits-all’ approach is simply inappropriate. Unique offerings require different systems that reflect what a business does and doesn’t have.”

‘CRM systems depend on the users just as much as the technology’

But CRM has a “bad name with success and adoption,” Revill said, because so many partnerships between software developers and money management firms fall at the final hurdle once it goes live, most often due to poor decisions early on. Then, over time, poorly-trained employees or new hires unfamiliar with a fresh system can often prove fatal to long-term success.

“CRM systems depend on the users just as much as the technology, so early engagement with staff, as well as ongoing education, is crucial to a successful implementation,” Revill said. “We advocate a project scope that is firstly aligned to the top business goals, then to take a phased approach: roll it out gradually, one team or jurisdiction at a time. This way, a firm doesn’t bite off more than it can chew.” Xpedition’s implementation period typically spans three to nine months, he said.

GDPR and dealing with data complexity

In the wealth management space, technology and data issues are especially complex, Revill said.
The sector’s insatiable appetite for deals combined with an increasing demand for all-under-one-roof services means money managers are operating in more vertical markets than ever. But as businesses scale up, they often “package up digital solutions and applications,” Revill said, “layering inherited legacy systems” to their own detriment. This creates “a whole challenge around data discovery,” explains Revill, because a client’s data could be recorded under “a number of guises in a number of different systems and structures”.

“A huge number of firms don’t have a single view of truth for a client,” he said. Xpedition’s software solves this problem, while offering an average 8:1 return-on-investment ratio, Revill added. “Capturing, holding and using the right data about clients allows you to exploit a return.”

With European reforms to data protection laws under GDPR just around the corner, it is essential that wealth managers have their data silos in check to avoid penalties of up to €20 million or 4 per cent of their annual turnover – whichever is higher.

“GDPR is driving a need for change, as firms are realising they need to see all their data in one place,” Revill said. “Systems and processes must empower staff to sift through various systems, check client data, check they are allowed to use that data and report back to regulators. GDPR is an opportunity to consolidate data lakes, streamline data management and demonstrate care in your clients’ data and privacy.

“Many firms are struggling to understand what data they can legitimately keep, how they can de-personalise data sets and still keep them as assets, and what compliance means for their data.” And firms operating across multiple jurisdictions often find themselves in murky waters trying to navigate cross-border regulations.

“With cross-border regulations, there are many ways to skin the cat,” Revill explained. “It requires a lot of attention, but once the right systems are in place, it is easy.” He explained that Xpedition’s platform can be programmed to automatically “mask off certain jurisdictions and data sets” that a firm may not be allowed to access, saving it from regulators’ cross-hairs. With over 750 CRM projects under its belt, Xpedition’s success rate is enviable.

The next generation of HNWI

Revill also spoke about the next-generation of wealth holders and how digital offerings are paramount in order to meet changing demands. “We are right in the eye of the storm,” Revill said, referring to the transfer of some $30 trillion forecasted to change hands over the next decade. “The new generation of ‘Millennial’ clients expect to do business in a completely different way. They’re extremely tech-savvy, and this is driving change to how clients are serviced. In this low interest rate environment, client experience is increasingly important as a differentiator.”

As a business, “it is really important Xpedition isn’t just perceived as a CRM builder,” Revill stressed. “Over the next year we are making important changes to our portfolio of offerings”.
Revill is “very excited” about investments Microsoft is making in artificial intelligence. Partnering with the technology giant “makes Xpedition’s business model highly scalable”.

The firm is no stranger to deals, Revill said, as its history is peppered with acquisitions and sell-offs.
M&A “is an open door,” he said. “Xpedition is a firm of grown-ups. We know what we are good at, we know what we like and don’t like. We are not in the habit of making acquisitions for the sake of it because it looks like the next big thing to go after – especially if we can build it with our own DNA instead.”’

About Xpedition Wealth Management

Previously known as TouchstoneCRM, we offer so much more than CRM and business software. We deliver real business value through expert consultancy. We’re known for our questioning nature and for challenging the status quo.

We succeed when you succeed, inspiring clients with insight led guidance. Our market leading expertise and industry knowledge will help your business to reach its goals.
We understand the Wealth Management industry. Our experts are passionate about sharing their knowledge, revitalising client experiences and improving operational efficiency. At Xpedition, we’ll show you the way.

Contact Ben Revill to learn more about how Xpedition Wealth Management solutions can help you drive growth, ease the burden of regulation, strengthen relationships, and deliver a modern, digital, holistic client experience.

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