Best-of-breed or single provider? How to satisfy your technology needs

How can wealth managers best meet their increasingly mission-critical technology needs?

To stay relevant to an ever more digitally-demanding client base, firms have taken massive strides in recent years to catch up with the technology provision seen in retail financial services and other consumer sectors. Improvements have ranged from upgrades to core banking platforms to better websites, online client portals, mobile apps and automated tools for advisors.

Best-of-breed continues

To do this, notes the latest WealthBriefing/SS&C Advent Technology & Operations Trends survey[1], wealth managers have generally adopted a best-of-breed approach, enlisting a wide range of technology providers to satisfy their and clients’ rapidly-evolving needs.

And this best-of-breed trend seems set to continue. More than a third of the survey respondents say they need multiple technology providers. None said their firm’s requirements are met solely by their main technology provider.

In part, this reflects the growing need to tap specialist capabilities that institutions’ in-house teams or main technology suppliers may struggle to provide—think mobile apps, or other digital client-facing tools that can enhance the client experience and increase efficiencies.

Reversing the trend?

But while a best-of-breed approach predominates at present, the report suggests institutions may increasingly turn to those vendors able to deliver end-to-end platforms that require minimal bolt-ons.

Such ‘one-stop shop’ solutions offer a number of powerful benefits: seamless data flows and more real-time solutions; reduced complexity and cost by not having to integrate multiple provider solutions; a lower total cost of ownership; and improved control from not needing to manage a medley of vendor relationships.

Partnership under one roof

Which isn’t to say that sticking to a narrower range of solutions providers, or even a single vendor, is necessarily a limiting factor, observes the report, since these days technology firms often have a variety of partnerships in place to supplement their areas of expertise.

In this way, wealth managers can leverage a ‘core’ vendor to handle the bulk of their front- to back-office activities—with all the data and operational efficiencies that confers—with a selection of more niche providers for specialist tasks and business processes, such as mobile apps, social media communications or advanced risk management.

The upshot, notes the report, is that “institutions are actually able to access many solutions through just one.”

Given the industry’s growing complexity, diversity and cost pressures, that will be a powerful advantage.

[1] Technology & Operations Trends in the Wealth Management Industry 2017, by WealthBriefing and SS&C Advent

To get a full copy of the report, visit “Technology & Operations Trends in the Wealth Management Industry 2017”.

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