Collaboration, the new disruption in wealth management

Intelligent, strategic technology collaborations enable and increase the likelihood of a successful digital transformation say Sharmil Patwa, Managing Director at Opus Una and David Noyce, Head of Software Engineering at Opus Una

Wealth management is not just about managing and safeguarding assets. For a truly ‘customer-centric’ experience, wealth managers must now also enable their clients to make their own financial decisions and facilitate greater access to advice.

Organisations of all shapes and sizes have recognised the urgency of digital transformation to meet these fast-changing client needs and stay relevant in an ever more competitive industry environment.

To make meaningful progress, reliance on home-grown technology is unlikely to yield optimal results. WealthTech (encompassing both vendors and digital wealth managers) offers a path to overcome some of the industry’s key challenges.


Incumbents, new entrants and WealthTech vendors all have their own challenges. For established wealth managers:

• Cost-income ratios remain stubbornly high. Often driven by high compliance and technology costs and increased competition driving down fees

• Achieving and maintaining regulatory compliance is expensive, causing a distraction from core activities or de-prioritisation of revenue-related initiatives

• Delivering and embedding a technology change roadmap that is both cost effective and high speed to value is difficult


While newer, digital-first entrants are still to make an impact (if measured by AUM or profitability), they are certainly showing the ‘art of the possible’. For them, different challenges exist:

• Acquiring clients and assets efficiently to achieve profitability

• The need for new revenue streams to drive growth

• A lack of domain knowledge and experience


WealthTech vendors must demonstrate compelling value to their wealth manager clients:

Defining powerful use-cases that solve high priority problems or create competitive advantage

• Identifying cost and risk reduction possibilities in a complex legacy environment

• Creating credible thought leadership and a dynamic product roadmap that cements long term client relationships


We see three areas where collaboration between different participants in the ecosystem can create mutual benefit and improve consumer service.

1. Financial planning
With the welcome but more complex evolution of the pensions landscape, many of us will need help planning our retirement and consolidating multiple accumulated pension pots. The traditional financial planning process is time consuming and expensive in the UK. Many of us that have much to gain from financial planning fall into the ‘advice gap’. We have already seen that the robos in their search for new revenue streams are demonstrating that the application of technology can make advice services more accessible and we have already seen a number of collaborations between the incumbents and robos in the investment management arena. Next, can incumbents collaborate with the robos to deliver planning at a lower cost to serve?

2. Compliance by design
Compliance cost and risk of penalties is increased because most organisations’ processes and core data models are not compliant by design, particularly in high exposure functions such as cross-border marketing. RegTech solutions have become successful in the market over recent years not just because they automate a particular compliance burden or enable direct access to the latest rulesets. Essential for sustained compliance is a transparent, consistent interpretation and execution of regulatory rules. Solution vendors now play a key part in the industry compliance ecosystem, bringing together participants and regulators to create a common view of what good compliance execution looks like. Vendors in this way not only reduce the compliance burden but also the risk of getting it wrong.

3. Holistic view
Open Banking was designed to increase innovation, competition and transparency in banking and payment services. It is starting to bear fruit. Open finance would extend the principles to a wider range of products. A holistic view of a client’s assets would be, we believe, a killer app. The success of an open finance concept is, in many ways, dependent on the most involved collaboration, where regulators, providers of financial services (established and new), technology vendors and end customers must align. 

Optimised technology strategy

The modern CTO needs to be a master of building the right relationships with technology vendors and other ecosystem members to complement internal expertise and build on areas of competitive advantage. A single technology platform composed of best in class vendor solutions, customised and  integrated with internal tools, can achieve a coherent organisation vision and deliver amazing, differentiated customer products. Given the number of large scale digital transformations that fail or disappoint, success is not easy to achieve, or even define. However, key ingredients are:

• Customer acquisition and satisfaction – developing and maintaining greater numbers of satisfied customers (that advocate) for your products

• Roadmap delivery speed – sustained faster cycles of development from identification to fulfilment

• Overall return on investment – efficient use of technology dollars with minimal wastage

• Performant and secure services – processes and technology capability that always work, keep data safe and build customer trust

Technology collaborations need to enable and increase likelihood of this success. Partner selection and due diligence must look beyond the usual capability and commercial criteria and assess the outlook for seamless product evolution over the long term. You are not just buying in the technology capability but skills and ways of working that help the whole organisation transform.

Culture and methodology evolution

Close collaboration with more naturally nimble and agile technology firms can  contribute in very meaningful ways to achieving successful digital transformation. Focusing on customer outcomes and an amazing experience which improves acquisition and retention is in the DNA of the best FinTechs. Focus on experimentation and learning quickly encourages
deployment decisions that prioritise higher risk as well as higher value
– rapid understanding of what works. Traditional firms often struggle to free key staff from fear of failure in the right balance with risk and control. Cultural synergies in mindset can create this environment for digital change to thrive. In addition, bestpractice ways in which technology is delivered enables faster deployment and encourages incremental focus within an overall larger agenda. Technology-based firms are often superior in their execution of these practices, as technology is their business. Embedding this know-how within wealth management organisations dramatically increases speed of adoption and the harnessing of associated benefits. The most fundamental benefit of the newer technology delivery methodologies is ensuring the business is at the heart of leading and evangelising change. Involving business and key support function leadership in the design and execution of digital roadmaps rather than being internal customers of them, is the path to better and quicker results. Alignment of objectives, values, and incentives within a firm and between internal and external parties is a crucial and constant imperative for the industry’s change leaders.

Leading wealth management services need the magic combination of superior technology, domain expertise and a critical mass of clients (assets). Natural advantages in one of these areas does not guarantee success – disruption  through organic buildout has proven difficult for both established wealth managers and new entrants. A step-change for clients in both function and experience may better be achieved by intelligent collaboration between established wealth managers and WealthTechs. We at Opus Una believe this combined expertise and the underlying changes in mindset and ways of working that are triggered, is the path to unlocking the digital opportunities in wealth management. If collaboration with your traditional competitors can create greater business reward and good client outcomes, then why not?

Published in The Wealth Mosaic’s UK Technology Landscape Report, Nov 2020.