InvestCloud provides Top 5 Financial Services Technology Trends vs. True Cloud

Top 5 Financial Services Technology Trends vs. True Cloud – August 2014

By Colin Close, President, InvestCloud, Inc. Periodically, we take stock of current trends in financial services technology that we think have a level of significance and currency that make them worth paying attention to. We observed 5 trends that reflect what key industry leaders, regulators and solution providers now consider to be the important current technology opportunities and themes, including how to leverage financial technology innovation while managing the regulatory and risk issues that are a particular to our industry. Following is an overview of those 5 key themes: 1) Digital Disruption – Technology innovators, like InvestCloud, have long seen financial services as an industry ripe for digital disruption. The difference now is that the pace of new technology offerings aligning with heightened client expectations around digital delivery of services has hit a pitch never seen before. CNBC summed up the challenge with a recent article titled, “You may soon get financial advice from a machine.” We think this competitive deployment of technology is the key reason why InvestCloud is seeing such robust interest in our own platform. Our custom applet delivery model is ideal for market circumstances like these where firm’s wants to retain the ability to remain flexible and quickly adapt to new client driven opportunities. This might be Sci-Fi to some but the Robo-Advisor is a trend that might just be an assistant to a manager or a direct interaction with an end client.

2) The Cloud gets Louder – Although most decision makers in the industry have heard and gave lip service to the well-known benefits of “True Cloud” delivery – lower costs, better scalability, and more reliable and rapid implementation - it has only been recently that firms have begun to move past their concerns with security and control. Other contributing factors include more intense competition combined with lower revenue which are elevating the cost advantages of cloud delivery. As a result, fewer and fewer firms are asking whether or not they should move to the cloud. Instead, they are asking the better question: “When and how best to leverage cloud delivery?” As the only true, multi-tenant cloud provider that has the flexible ability to overlay existing data sources, InvestCloud is ideally situated for these firms that are ready to move, but want to incrementally stage their adoption of cloud services.

Unfortunately, the fakes get louder too. The fake cloud providers are just taking their enterprise solution and hosting their software in the cloud – this is not helpful and the cloud experience will in practice be very similar to enterprise software, and not achieving the massive benefits of true cloud.

3) Digging Bigger Data Mines - As integrated cloud solutions continue to reduce latency and drive more efficiency and help streamline business processes, not only will firms be able to increase operational excellence and reduce operating costs, they will also be able to accumulate a deeper and broader set of data on their clients. Currently more than 2.5 billion gigabytes of data are created each day by our industry, but so far little is being done to mine client intelligence from that data. Figuring out how to do that will soon become a serious competitive advantage for firms that do it well. This is not just about internally generated data, it is also about correlating and linking external data stores as well. A powerful example is a service that is now available to InvestCloud’s client firms that leverages external real estate and automobile

pricing records to be able to automatically update the value of a wealth client’s land holding and cars to give a truly comprehensive view of assets.

The leverage of pre-integrated platforms can only be achieved if there is a true cloud.

4) Ready for the Regulators – According to industry experts, nearly 50% of firms are not considered ready for regulatory change. One reason for this high number is that the volume and scope of regulatory initiatives continue to outpace the rules writing capability of the regulators. Current estimates are that approximately 25% of current regulations have not yet met rulemaking requirements. It is hard to prepare for, much less enforce, regulatory initiatives that do not have rules to comply with. The seemingly never-ending process of meeting regulatory requirements for many has even caused them to rethink the way they work. Financial services firms will continue to invest heavily in technology, people and process change between now and 2015. Despite these investments, businesses are still learning from others successes and failures, to reach regulatory excellence. InvestCloud enables firms to better tackle this challenge with our PLACE™ architecture (Primary Location of Access, Control, and Entry). By eliminating data silos, our integrated cloud platform allows more transparent access and control by firm’s compliance managers.

Again, this approach is only achievable through true cloud.

5) The Agility of Mobility – Last but not least, is the continued momentum behind the adoption of mobile services and reporting. We now commonly see firms that are trading their printed pitch books and quarterly client review books for the convenience of iPads. More and more firms are implementing mobile content management platforms that allow for clients’ sales and marketing teams to provide mobile access to investment product artifacts such as factsheets, pitch books, investment reviews, and so on, to meet the demands of asset and wealth managers, compliance, and prospective investors. This is reflected at InvestCloud in the demand we are seeing for our custom iPad and Andriod apps. We have also seen some of our wealth management clients buy iPads for their A & B tier clients to help accelerate the move away from paper delivery.

If you would like more information about InvestCloud and how our integrated, true cloud platform has become the industry leader, now with more than 2500 applet views and $1T in assets serviced by the platform, visit us at www.investcloud.com or click here to request a demo.

Colin Close (President) is a securities market expert with over 20 years in the field. Colin held a senior position at Chase Manhattan creating the operations blueprint to re-engineer customer services delivered by the bank both in London and New York.

Colin then became Managing Director of Investor Services at Bankers Trust and Deutsche Bank with P&L responsibility for various asset services product lines.

Colin later joined Netik as CIO and became President of Netik. Colin has a BA (Hons), and an MBA from Cranfield Business School.