Working together: the importance of interoperability in wealth management innovation
5 mins readBy Shri Krishnansen Posted on 13.08.2024
According to research by Accenture, businesses with high interoperability grew their revenue six times faster than peers with low interoperability.
The global professional services consultancy also estimated that if two similar companies started with $10bn in revenue, one of them would make $8bn more than the other over a five-year period. You guessed it – the highly interoperable firm.
These findings were based on a survey of 4,000 C-suite executives and published in Accenture’s 2022 Value untangled report. Two years on, the study remains as relevant as ever.
But what is interoperability and why does it matter to the wealth management industry? Put simply, it’s the ability of different computers and software to exchange and process information.
And as far as wealth management is concerned, interoperable technology is essential for reconciling two contradictory truths: the sector is built upon many different technologies and service providers but customers now expect seamless, connected wealth management experiences.
Fixing one problem at a time: digital transformation is easier when you start small
Financial and user benefits aside, there are also good practical reasons for ensuring different systems work together. For instance, businesses still in the early stages of digital transformation need technological stepping stones that enable them to deliver modern experiences.
This could involve augmenting their offering with technologies from different vendors to progressively introduce new features and functionality at pace — but these all need to play well together to produce the desired result.
At WealthOS, this is a strategic priority, which we’ve approached in a couple of ways.
Firstly, we’ve purposely designed our cloud-based API platform to allow modularised adoption of its many features. In essence, wealth management businesses can dip their toes in the innovation water, solving one problem at a time rather than replacing entire legacy systems.
Businesses can use one, some or all of our modules, which take care of everything from core functionality like Investors, Pots, Transaction Management, Payments & Transfers, Trade Order Management, Holdings and Securities & FX Data, to value-additive functionality including Tax Wrappers / Financial Products, Portfolio Management & Rebalancing, Reporting, Custody Features, Fees, Multi Currency Features and Documents & Communications.
Interestingly, some of our customers are leveraging specific modules to accelerate by a number of years plans to launch new products – such is the power of high interoperability.
Secondly, the leadership team at WealthOS comprises seasoned wealth management, investment and pension practitioners, who are mindful of the tech diversity within financial services ecosystems.
That’s why, as relatively new entrants in the innovation space, we decided from the get-go that it’s on us to ensure our solution has the ability to integrate with as much of the existing landscape as possible.
Wealth management businesses we work with find that our platform can either integrate with their current system or work seamlessly alongside it.
Good for everyone: how interoperability serves businesses and their customers
From a customer’s perspective, interoperability needs to be invisible. The user journey has to remain the same regardless of what is happening behind the scenes. Whether they’re accessing a GIA, an ISA or a SIPP, there should be no clunky switches between multiple interfaces to interact with wealth management products.
This approach is driven by our founding principles. We believe in a world where wealth management is as simple and seamless as that offered by leading platforms like Amazon, Uber and Netflix.
A great example of this simplicity is Amazon’s one-click buying functionality, which has brought unprecedented convenience to consumers. WealthOS is delivering the same kind of streamlined experience to the wealth sector, enabling customers to interact with their funds, when and how they desire. That means removing common customer pain points.
For instance, automating tax calculations and handling payments in order to make it easy for people to meet their obligations in a stress-free manner. Or, making it possible to draw on investment funds in real time rather than having to wait weeks for cash to arrive in a bank account.
And that’s really what interoperability is all about – enabling wealth management businesses to integrate those technologies that are providing the best user journeys.
Get in touch with shri@wealthos.cloud to find out about WealthOS’s interoperability potential with your current propositions and products.
