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The wealth and retirement industries are undergoing significant disruption. Margins are shrinking, but competition and customer expectations are increasing. To differentiate yourself, you must focus on delivering a relationship-based experience.
But outdated technology, inefficient operations and resource management require significant funding and are difficult to adapt to a fast-changing market. So, to capitalize on disruption and unleash new growth potential, you must re-examine how you operate.
Cloud based applications, or Platform-as-a-Service solutions have experienced strong growth as wealth and retirement firms see the value in its flexibility, security and scalability. That’s only accelerating. The 2021 FIS Readiness Report found that 99% of wealth managers and retirement plan providers will increase their reliance on cloud in the coming year.
Meanwhile, Business Processing as a Service (BPaaS) – or outsourcing – which used to only be thought of as a factor on the cost side of the equation, is quickly becoming another favorite strategy due to its effectiveness in further increasing agility and scalability.
According to the Readiness Report, 95% of wealth and retirement firms will increase their reliance on a BPaaS model over the coming year.
Like the cloud, one of the attractions of BPaaS is that you don’t have to outsource everything – you can pick and choose what makes the most sense for your organization.
And according to the Readiness Report, the most popular areas to hand off are compliance, risk management, and administration and accounting.
There are several reasons for this. First, these areas are typically not differentiators for wealth or retirement offerings, so outsourcing them to a third party is a logical move.
Second, it reduces risk because the BPaaS party takes on the operational risk of those functions.
Third, it eliminates a lot of complexity and workload for your team, especially for high volume administrative tasks – but also for complicated and fast-moving areas like regulatory compliance, where you can really benefit from dedicated experts.
Fourth, it gives you the ability to refocus your staff on revenue generating differentiators, such as driving client engagement.
But to keep pace and keep your customers, your technology also needs to be agile. It must let you rapidly add tools and services, integrate new partners and create a compelling connection across every interaction, digital or otherwise.
BPaaS allows you to requisition that tech platform in a shared services model. So, you can shift more of your investments to those tech features that will let you meet the demands of your clients in a way that others simply can’t.
Put it all together and cloud, BPaaS and agile technology let you focus and execute on the strategic initiatives that allow you to differentiate yourself from the competition.
Outsourcing is no longer just a cost play. We asked why firms would consider outsourcing. Their number one answer was speed to market. While cost is still a factor – and it should be – the results are clear. BPaaS is a proven way to go faster and ensure that you’ll be here to experience the next set of market disruptions.