Once compliance has gone digital, it will be possible to perform all kinds of analyses on it. This opens up completely new opportunities for risk management professionals and executives. In particular, AI will enable people to understand regulations much faster, empowering them to get more done at a higher level of quality, says Thomas Schäubli, Head of Marketing at Apiax.
Challenges: What do you see as the main technology and technology-related challenges for the wealth management sector through 2020?
We identify three major challenges for 2020 and possibly beyond. The first challenge is that companies need to find the right tools to enable them to grow their business despite the increasing regulatory headwinds. The second challenge is to develop technologies to bridge the gap between where compliance expertise is located in large organizations – typically the legal and compliance departments – and where it is most needed – typically at the front line, at the business units. Finally, we believe that companies must find ways to create ‘compliance by design’ wherever possible, i.e. they must find a way to digitize compliance and implement it in processes and products in such a way that it does not have to be laboriously monitored and adapted.
Opportunities: What do you see as the main technology and technology-related opportunities for the wealth management sector through 2020?
In our view, wealth managers should invest in understanding the technology that enables written regulations to be transformed into machine-readable compliance rules. This is the foundation for everything else, from business-enabling applications to API-driven solutions that are compliant by design. Please note that we say they should invest in understanding these technologies. We believe that the way wealth managers deal with regulatory compliance will change dramatically in the coming years, and wealth managers should be prepared for these changes.
If companies are unable or unwilling to invest in emerging regulatory technology, we suggest that they look for partners who can provide them with the knowledge and/or technology to be ready when they need it. It may also make sense for wealth managers to approach their existing technology partners about digital compliance solutions. Many RegTech solutions, including Apiax’s, are available through a number of existing technology providers and are therefore extremely easy to integrate when needed.
Market focus: When considering your wealth management clients and prospects, where are they currently focusing their technology investments and resources: clients, advisers/staff or their business infrastructure?
In our experience, wealth managers clearly focus their technology investments on the client, although this can have very different meanings. We find that our clients and prospects invest in areas such as onboarding processes, theme-based investments, and digital compliance solutions.
Compared to last year, we see much stronger momentum on two issues, namely tax and data protection. In the tax field, we see that wealth managers are becoming increasingly sensitive to the tax implications of their investments. It seems that taking the tax impact into account is increasingly important to an audience that is more cost-conscious and more interested in transparency than in the past.
The second issue on which we see major development is data protection. We find that almost none of our customers or prospects can escape this topic and that most of them have difficulties in setting up the right tools and processes. In fact, we would say that data protection inquiries are very close in their importance to inquiries about cross-border compliance issues, which is our existing focus.
Excite: When you look at the technology capabilities and resources now available to the wealth management sector, as a solution provider, what excites you most in 2020?
What appeals to us most is the general dynamics we observe. Wealth managers understand very well the advantages of technology-supported solutions. At the same time, we sense a very clear focus on value creation. It is not enough to offer something new or different, but wealth managers show an unmistakable focus on the business, which is very understandable for us.
At the moment, we have the impression that the wealth management industry understands that there is a strong need to organize things differently, to take different issues out of their silos and to make collaboration much easier. Let's take an example from RegTech. In the past, many wealth managers received their compliance knowledge in a written, often inconclusive format, and interaction with knowledge partners would be tedious. Today, more and more wealth managers expect to receive their compliance knowledge in a digital, actionable format, e.g. via a mobile application, and they expect seamless collaboration with content partners. Basically, we feel that everyone is getting used to the great user experiences they have on their phones, and they expect the same from their business applications.
Two other major topics are analytics and artificial intelligence. Once compliance has gone digital, it will be possible to perform all kinds of analyses on it. This opens up completely new opportunities for risk management professionals and executives. At the same time, artificial intelligence will enable people to understand regulations much faster, empowering them to get more done at a higher level of quality. We believe that great added value will be created in these two areas.
Your support: Finally, as a solution provider to the wealth management sector, what will you be doing in 2020 to help your clients and prospects meet their main technology and technology-related business needs?
What we are doing in 2020 is to heavily invest in our products. This means mainly two things. On the one hand, we invest in our products directly, developing new features and new applications that make it even easier for our clients to master their compliance challenges digitally. On the other hand, we expand the applicability of our tech stack so that it becomes more relevant for more business cases. Essentially, we are expanding beyond our existing capabilities in cross-border compliance and move into new compliance topics such as tax, data protection, asset management, and many more.