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Survey highlights contradictions in wealth managers’ approach to outsourcing tech and the cloud


Significant uncertainty exists within the wealth management industry about the advantages and costs of increased outsourcing of technology to external solutions providers and, in particular, to the Cloud.

That’s according to a recent survey of 100 firms conducted by Weatherill Consulting on behalf of Advent Software. Almost half of the respondents anticipated an increase in their expenditure on Cloud solutions over the next three years, with 14% expected a ‘significant increase’.  However, despite the fact that a Lindberg International study has indicated that legacy systems, still the technology backbone of many wealth managers, are some 15%-20% more expensive to maintain than their Cloud-based equivalents, nearly one third of the survey firms said that cost remains a barrier to change or migration.
Those firms that do use a level of Cloud technology are themselves divided between the public Cloud (10%) and a private Cloud solution (20%) although the most popular approach (31%) is making use of various forms of public/private hybrids.
More generally, the Advent Survey underlines changes in outsourcing trends as the quality of solutions has improved in recent years at the same time as financial, regulatory and competitive pressures have compelled firms to rethink their enthusiasm for tailor-made approaches.  In short, off-the-shelf technology solutions are becoming more popular despite a continuing and understandable reluctance to outsource sensitive or proprietary data.
At the same time, the survey anticipates ‘boom times for specialist technology providers’ in response to increased regulatory burdens, in particularly FATCA and MiFID II.  “83% of respondents said that technology plays a very important or critical role in helping their firm meet its regulatory obligations but 86% also believe technology could be doing more.”
The survey results, which (like Caesar’s Gaul) are divided into three parts: Embracing the Cloud, Exploring the Outsourcing Option and Technology and Regulation, are attached and are open to use by journalists.  Please quote the Advent Survey in any copy.

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