In a world where there seems to be a robot or machine for everything these days….a robotic hoover, self driving cars and even the financial "advice" process, you would think that overall, the quality of technology has improved significantly.
This is not our personal experience. We have been in business now for nearly two years – nothing is paper based anymore… everyone needs a device – a tablet or laptop and a phone… that works. In the last two years, we have had to replace our laptops and phones eight times between us. And our requirements are very simple… email, word documents, powerpoint (well we are consultants after all…), having at least 4 hours' worth of battery and just turning on and off when you want it to; so nothing too taxing or draining for a computer. First we had a device that would only last 2 hours and when you plugged it into charge, it came up with the most helpful message "plugged in but not charging"…therefore it was a constant balancing act of finding places where there were plug sockets and leaving time to be able to turn the thing off to charge it. Then we have both had "motherboard" issues, where the computers wouldn't turn on and we lost all the information on the hard drive (luckily for us we practice what we preach and have an exquisite BCM plan) – we've lost count of the number of times we've had to set up our devices from scratch. The chargers have had to be replaced, software re-installed, laptops sent away and returned. In a day where technology supposedly rules the world, have we been really unlucky or is it now technology is more flakey and less robust than ever before?
Are we putting too much faith in technology? We've seen a significant volume of transformational change in recent years across Financial Services, focusing on technology replatforming. Some of those change initiatives have been more successful than others, but how many have delivered the outcomes they set out to achieve? Has technology change proven to be the holy grail that senior sponsors expected? Across the Wealth industry, in recent years we've seen (and continue to see) millions invested in technology-led change, with investment ranging from £6m to £450m (and rising). In each case the initiatives have delivered late, over budget and show little or no resemblance to the scope they originally set out to achieve.
The reason these providers have or are going through major re-platforming exercises is to reduce cost, simplify their operating model, attempt to automate current manual processes, be able to launch new products quickly and to meet the needs of a customer demographic increasingly looking for digital capabilities to manage their finances and investments. A major play in this is moving off so called crumbling, legacy, expensive, unstable and risky technology…technology that's supported the servicing of customers policies and accounts for over 20 years. Is new really better than old? The financial press is riddled with stories about replatforming gone wrong…costing much more than ever expected, taking much much longer than anticipated, delivering much less than previously demanded And because of this providers often cannot decommission those legacy systems anyway…as they cannot replicate the more complicated features of those products….which calls into question the overall objective and business case for pursuing a re-platforming exercise in the first place.
Are the new platforms more robust? Well in theory…yes. They are in support, have more resources to maintain them, should be more integrated with other systems, built on new hardware…yet the reality is they seem to be plagued with performance issues…and the fundamental basics seem to be missing… being able to deal with volume, exceptions or change.
Is technology the silver bullet providers are hoping for? Is it more about getting the basics right first, not rushing to change anything unnecessarily and if there is transformational change required, to do it properly? Of course we know technology is only one aspect; but it's fundamental. As in our daily lives, if we lose our phones or our email doesn't work, we can't function very well…and we get very irritated, very quickly! The same is true for financial service providers. Platforms and the technology get a lot of focus; however often re-platforming isn't just about technology change; it's about how the business model needs to change in order to survive in challenging market conditions. Margin pressures will surely continue and the race towards optimising administration activities and lowering costs will be pursued incessantly. Technology however should be the enabler, not the driver.