Increasing consolidation to lead to ‘rapid digitalisation’
03 November 2020 London
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Increasing consolidation is predicted to lead to rapid digitalisation in corporate services, trust and fund administration, according to a new survey conducted by TrustQuay.
In a global survey of 90 wealth managers, private banks, family offices, corporate services providers, trust and fund administrators, the survey found that 81 percent of respondents felt the industry is undergoing unprecedented change.
The current highly fragmented industry is expected to consolidate at an even faster pace, with 59 percent of respondents predicting that consolidation will increase over the next two years.
Meanwhile, some 41 percent of those surveyed said that they also expect their own firms to increase levels of mergers and acquisitions activity.
Further key takeaways from the survey showed three out of four believe the industry is polarising between global players and market consolidators, and niche specialists in a particular area.
Nine out of 10 believe firms need to digitalise their business models to remain competitive. The top three areas of innovation over the next five years include automating workflows, moving to the cloud and implementing client portals.
The survey highlighted that compared to many industries, even those within financial services, the corporate services, trust and fund administration market “lags far behind in terms of digitalisation, often still relying on highly manual and labour-intensive working practices”.
According to TrustQuay, this is reflected in the survey with an average ranking of five out of 10 in terms of how far firms felt they had progressed on their digitalisation pathway.
However, two-thirds of respondents rated their firms as low as six or under, with a quarter rating themselves four or under on the digitalisation scale.
“Digital transformation is a real challenge but will become a key enabler for firms to provide levels of service efficiently and a high-quality digital customer experience,” commented Keith Hale, executive chairman of TrustQuay.
“The industry digital offerings currently lag far behind other sectors and so the pressure is on to digitally transform in a much more compressed time frame than has happened in other sectors of financial services,” he commented.
In terms of regulation, 94 percent of those surveyed felt that regulatory requirements are continually increasing as a result of the ever-rising tide of regulation since the global financial crisis, TrustQuay noted.
TrustQuay explained that this combined with a drive for transparency, has constantly increased the regulatory and compliance burden on firms.
Commenting on the survey findings, Hale said: “Despite the challenges, this time of unprecedented change can be a great opportunity for those firms who are able to successfully adapt to change.”
“But firms need to act now - in five years’ time the successful firms will have already digitally transformed and the industry will look back at 2020 as a turning point for the future growth and opportunities in corporate services, trust and fund administration,” Hale concluded.
In a global survey of 90 wealth managers, private banks, family offices, corporate services providers, trust and fund administrators, the survey found that 81 percent of respondents felt the industry is undergoing unprecedented change.
The current highly fragmented industry is expected to consolidate at an even faster pace, with 59 percent of respondents predicting that consolidation will increase over the next two years.
Meanwhile, some 41 percent of those surveyed said that they also expect their own firms to increase levels of mergers and acquisitions activity.
Further key takeaways from the survey showed three out of four believe the industry is polarising between global players and market consolidators, and niche specialists in a particular area.
Nine out of 10 believe firms need to digitalise their business models to remain competitive. The top three areas of innovation over the next five years include automating workflows, moving to the cloud and implementing client portals.
The survey highlighted that compared to many industries, even those within financial services, the corporate services, trust and fund administration market “lags far behind in terms of digitalisation, often still relying on highly manual and labour-intensive working practices”.
According to TrustQuay, this is reflected in the survey with an average ranking of five out of 10 in terms of how far firms felt they had progressed on their digitalisation pathway.
However, two-thirds of respondents rated their firms as low as six or under, with a quarter rating themselves four or under on the digitalisation scale.
“Digital transformation is a real challenge but will become a key enabler for firms to provide levels of service efficiently and a high-quality digital customer experience,” commented Keith Hale, executive chairman of TrustQuay.
“The industry digital offerings currently lag far behind other sectors and so the pressure is on to digitally transform in a much more compressed time frame than has happened in other sectors of financial services,” he commented.
In terms of regulation, 94 percent of those surveyed felt that regulatory requirements are continually increasing as a result of the ever-rising tide of regulation since the global financial crisis, TrustQuay noted.
TrustQuay explained that this combined with a drive for transparency, has constantly increased the regulatory and compliance burden on firms.
Commenting on the survey findings, Hale said: “Despite the challenges, this time of unprecedented change can be a great opportunity for those firms who are able to successfully adapt to change.”
“But firms need to act now - in five years’ time the successful firms will have already digitally transformed and the industry will look back at 2020 as a turning point for the future growth and opportunities in corporate services, trust and fund administration,” Hale concluded.
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