There was a time when certain industry commentators speculated that platforms would eventually make back office software redundant. Not so much now. This sector within the fintech industry – perhaps traditionally regarded as rather pedestrian in some quarters – is currently gaining advisers’ attention, according to our most recent research.
The reasons aren’t hard to find: the use of multiple platforms; the persistence of off-platform investment and now the demands of MiFID II on aggregated costs and much else besides. Advisers are turning to technology to help them draw together disparate data sets. In truth, back office systems are ideally placed to help them.
And the use of back office systems is set to grow:
Over a third (35%) of adviser firms that currently don’t use back office software say they plan to adopt a program within the next two to five years – and fully a fifth of these spreadsheet enthusiasts aim to do so next year.
Platforum Adviser Market, Fintech and Digital will be published next week
Back office systems are no longer simple CRMs – increasingly they act as adviser business hubs. Adviser firms are starting to see fast-evolving back office systems as a key tool for creating efficiencies in their advice processes, organising and protecting their client data, and providing integration to their platforms and many of the other third-party tech providers that service the industry.
We may be seeing a shift in the balance of power away from the platforms, although there appears to be little appetite for back office providers to act as custodians.
But many advisers tell us that they still have a long way to go before they succeed in unlocking the potential productivity gains promised by these powerful tools. With the tsunami of regulatory changes from MiFID II, GDPR and the Senior Managers Regime about to hit the adviser community next year, they had better start making better use of their systems to stay on top.