Written by Kevin Okell on Wednesday 11 February 2015
Despite ongoing predictions of consolidation in the platform market, the number of new entrants continues to grow. I don’t claim to know everything that is happening in the Platform industry but, to my knowledge, there are more than 20 companies currently selecting or implementing new platform technology.
A combination of RDR, auto-enrolment and new pension freedoms is driving new areas of the Financial Services industry into the arms of platform suppliers as they grapple with the challenges of managing high-volume, low value business across multiple wrappers and via new digital channels. Banks, pension providers and fund managers are all busy working out what to do and procurement departments are in overdrive. The level of activity is unprecedented.
What these newcomers need is a recipe book for baking the perfect platform and it’s not surprising that they have turned to the mainstream technology suppliers in search of one. Unfortunately it looks to me like the book has not been written yet. Instead I see big corporate change machines gearing up for another wave of transformation programmes and all starting from the proverbial blank sheet of paper.
This is unlikely to end well in my view. The Financial Services industry is under serious pressure to improve efficiency and platform operations must become a utility service to enable this. Leaving every new entrant to start from scratch and dream up their own unique combination of complex ingredients like client money, nominee structures, re-registration and payment cycles is destined to lead to unnecessary variation and additional cost – however brilliant the individual chefs.
Instead, all these ingredients, plus many more, should be clearly laid out with step-by step mixing instructions, optional variations (with cooking times) and simple illustrations for the chosen platform technology or service. That would be the recipe book I believe the industry needs to make the most of what is certain to be an enormous technology investment over the next few years.
Which is why I am so keen on basing every platform journey we support on our visual models of platform capability. I’m not suggesting that new platforms cannot be brought to market without such a recipe book but they will inevitably be bespoke creations that will cost more than they should to bake and will leave the suppliers with a motley assortment of product to maintain.
Of course there’s no guarantee that, even with a recipe book, there will be enough hungry customers to eat all the cakes that get produced. But that’s another subject…