TrustQuay’s Future Focus Report has identified that while firms believe digitalisation, automation and innovation should make them more competitive and valuable, the industry is struggling to move forward to reap the benefits.
In a global survey of 100 wealth managers, private banks, family offices, corporate services providers, trust and alternative fund administrators, the survey found that on average firms only score themselves five out of 10 in terms of how digitalised they are currently.
According to TrustQuay, this indicates that the industry knows it still has a long way to go on its digitalisation journey.
When asked to compare the sector to other areas of financial services, 92 per cent of respondents say that technological innovation in the industry needs to accelerate, with half acknowledging it currently lags behind in terms of its investment in technology.
A key catalyst that is driving forward the digitalisation of the corporate services, trust and alternative fund administration industry is the rising expectations of end-clients.
The survey finds that eight out of 10 respondents feel their firm could be better at delivering a digital experience for clients, with half of firms planning to digitalise their business models and client engagement in the coming two years.
TrustQuay identifies a clear dichotomy between belief and behaviour regarding the value of digitalisation as 78 per cent of survey respondents believe that companies that are digital leaders are more competitive and valuable than their peers. However, only 6 per cent believe their firm is a digital leader.
The same dichotomy is true when it comes to attitudes to technology. Nearly all respondents (95 per cent) say that technology should be viewed as an investment in growth, but only a third (32 per cent) say their own firm spends enough on technological innovation.
Commenting on the findings, Keith Hale, executive chairman of TrustQuay, comments: “While there is clear evidence from other sectors that digital leaders deliver significantly higher revenue growth, margins and profitability than digital laggards, there appears to be a dichotomy between belief and behaviour within corporate services, trust and alternative fund administrators.”
According to Hale, even though nearly all firms believe technology should be viewed as an investment in growth, rather than just a pure cost, only a third of firms feel they are investing the right amount in innovation.
Hale suggests more work needs to be done to change attitudes, and technology providers need to help firms by providing the tools and capabilities to make a clear assessment of the business case and return on investment for investing in technology.
“Automation and digitalisation inevitably happen sooner or later across all industries. So it seems inevitable that the future leaders in corporate services, trust and alternative fund administration will invest significantly more than is currently the case in digitalisation and automation in the short term, to reap the medium term benefits as the market rapidly changes,” concludes Hale.
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