Skandia is in discussions with International Financial Data Services over outsourcing the technology behind its £35.8bn platform and legacy business.
This week’s Money Marketing reveals the firm is conducting a review of both its platform and back office technology which could see it outsource to a third party or rebuild both propositions in-house. Currently the technology behind both the platform and the back office is proprietary.
Skandia says the move has been fuelled by the firm’s desire to integrate platform and investment solutions. It adds it is too early to put figures on how much it would cost to outsource the technology or build it in-house.
Old Mutual Wealth chief executive Paul Feeney says: “We are constantly looking at how we can improve our technology and processes so that we can more quickly respond to adviser and customer needs. Whilst we have not made a decision yet, when we do so our overriding objective is to ensure we offer the best service levels and most competitive investment solutions in the market.”
In January, a number of advisers reported problems with the Skandia platform technology after they were unable to generate pension illustrations for new business and top-ups. The problem meant firms could not obtain illustrations when trades were in progress.
IFDS provides administration on 60 per cent of UK mutual funds and is looking to develop a fully integrated platform proposition. It is part-owned by US investment software firm DST Systems, which bought Australian software firm BlueDoor Technologies in November 2008 for £8.2m.
IFDS, which holds a 24 per cent stake in Cofunds, declined to comment.
The Lang Cat principal Mark Polson says: “Skandia has demonstrated recently that its technology is probably in need of a refresh. Outsourcing is an increasing trend which means the differentiator between platforms is service, while technology is increasingly becoming a commodity.”
The Platforum managing director Holly Mackay says: “Core platform technology is becoming commoditised and we think we will see all platforms start to focus much more on the front-end and customer usability.”