Bravura Solutions group chief executive Tony Klim was lucky enough to work through the “golden age” of UK software in the 1980s and 1990s, when banking was becoming hi-tech with the introduction of credit card systems, online payments and secure networks. Now he is anticipating another exciting era in financial services technology, as pension freedoms create a need for product innovation.
“While the pension reforms have caused much strife across the industry, they will also result in product innovation, which is something we have not seen for some time. People do not need to buy an annuity so companies are looking at how to hold on to assets through flexible and guaranteed models.
“We are already working on some interesting new models around guaranteed products and flexible drawdown. It is great for us because technology is needed to support the new products.”
Klim admits keeping up with the pace of change in the rules and regulations is no easy feat. But the move towards greater individual responsibility for retirement planning came as no surprise to him.
Back in 1999, in his early days at Marlborough Stirling, Klim predicted this shift would create huge growth opportunities and demand for software solutions. “One of the main problems is the rate of change and our clients need to react reasonably quickly,” he says.
Bravura, an anglo-Australian firm providing software services to wealth managers, fund managers and insurance companies, believes the platform industry is the logical place to deliver the product innovation needed for the new pensions environment.
Klim says Bravura and its clients are particularly happy with the scale of opportunity that lies ahead, although the need to offer attractive and innovative new products is also challenging, not least for platform providers.
“Platforms will encompass traditional life and pensions, and possibly even banking, across multiple delivery channels. Far too many people focus on platforms as a business model. In reality, we are just talking about the infrastructure for the next generation financial services business,” he says.
Bravura has spent a huge amount of money on developing its Sonata technology as the “next generation” platform across investments and life and pensions globally.
Sonata is Bravura’s life and wealth management administration system that enables the firm’s clients to be more efficient and reduce running costs by connecting and engaging with their clients through a range of devices including a desktop or laptop computer, tablet or smartphone.
“As with all major step functions in technology, it has taken longer and cost far more than we initially envisaged but we are now getting significant traction on both sides of the world.”
“Unlike some of the other players in the market, our focus is solely on software and software as a service rather than administration. This means we are able to service both administrators and product providers alike. It is a business model that we have successfully deployed across the fund management industry for many years.”
Klim started his career with his feet planted firmly in the technology side of financial services. He got into software development once he realised his teenage ambition of becoming a rock guitarist was not to be. “I know it sounds corny but I so wanted to be a rock star,” he says. “My air guitar skills didn’t make the grade but I did graduate to a real guitar. I became a blues and jazz guitarist. I got to the point where I was practising three hours a night and ended up in an amateur rock band but I still didn’t make the grade,” he says.
At school, Klim shone at mathematics and, after graduating from university with a physics degree, became an analyst/programmer at Software Sciences, now IBN Data Sciences, working on defence systems. He then joined Systems Designers, now EDS, working in secure communications networks. “In the early 1980s, these skills became very much in demand in banking with the emergence of card technology and online payments,” he says.
In 1985 Klim joined The Software Partnership and moved into the business side, encompassing distribution. “The Software Partnership was an amazing business that was set up by a group of like-minded entrepreneurial individuals. It went on to be a pioneer and market leader in online banking technology before eventually being acquired by a very large US corporation.
“I learnt a huge amount about high growth companies and international business at that time through working with partners across the US and in Asia. We got a number of major banks using our system in the pre-internet banking era.”
Klim joined Marlborough Stirling in 1999 and led the integration of the Exchange portal, which Marlborough Stirling acquired in 2001. He left the group in 2004 due to an internal restructure and spent the four years prior to joining Bravura Solutions as an independent consultant.
“I worked as an independent consultant with a variety of financial services businesses and private equity companies. A key theme was the changing UK value chain in financial services distribution and the emergence of platforms. This was an area of interest that I had started to develop when working with the Exchange IFA portal at Marlborough Stirling. Platforms were almost a logical extension of the portal.”
For Klim, the future of the platform industry lies in its supporting technology. “Technology is very much on the agenda again as modern platforms need to cover multiple channels: advised, discretionary, execution only and potentially online advice.
“Scaleability and admin efficiency will become even more important with the continuing squeeze on the overall value chain. Shaving a few basis points off the admin cost model through use of modern technology can make a significant difference to the profitability of a platform. Multi-channel servicing and admin efficiency is the key to how platforms will make money.”
What is the best bit of advice you’ve received in your career?
Don’t sell technology; sell the business benefits of technology.
What keeps you awake at night?
The fact we have over $2trn of assets managed on our technology platforms. More seriously, my two daughters finding their way in life.
What has had the most significant impact on financial advice in the last year?
It has to be the changes to the pensions/annuity rules in the 2013 Budget.
If I was in charge of the FCA for a day I would…
Openly encourage more innovation in online advice.
Any advice for new advisers?
Embrace technology to make your job easier.
2008-present: Group chief executive and previously chief executive for Europe, Middle East and Africa, Bravura Solutions
2004 -2008: Independent consultant working with various financial services businesses and private equity companies
1998-2004: Managing director of UK Operations, chairman of Marlborough Stirling subsidiary Exchange FS and director, group strategy, Marlborough Stirling
1994-1998: Director of International Marketing and Product Management, Deluxe Data Corp.
1985-1994: Director of international business development, managing Director, Open Systems Division and director, Consultancy Services, The Software Partnership
1981-1985: Technical Consultant/Senior Systems Engineer. Systems Designers, now EDS
1979-1981: Analyst/programmer, Software Sciences, now IBM Data Sciences