The platform industry is currently grappling with the tricky technology upgrades so desperately needed to improve operations. But there has been little focus on the future.
So it seems apposite this week’s interviewee is Andy Smith, chief technology officer at Nucleus, a platform that emerged from the crucible of re-platforming in 2014.
What is his vision of the future, as the industry move from disruptor to maturity?
Smith is a big picture person and the big picture for financial services, in his view, is that it is a technology industry. As he says: “Most of financial services still hasn’t realised it’s just another piece of technology.”
It has been left to non-traditional, robo players to create digital tools to help financial services brands reach the Tinder generation. But there are signs that this is changing; not least because we all live in a digital world, whatever age we are.
Large fund groups are using acquisitions as a faster route to embracing technology. Intelliflo’s recent deal with Invesco is rumoured to have been worth £280m. While the end game may be flows, Intelliflo’s digital footprint and its wealth of data on advisers should give Invesco an edge. It also gives it access to a nascent automated advice proposition.
These groups would do well to heed Smith’s advice that things change when they are moved online. Mostly for the better. Indeed, he goes so far as to say almost every aspect of service improves.
Smith’s early career took him all over the world, working on tech in the banking and telecoms sectors. The 1990s saw these sectors wake up to the fact technology was the future and much of his work involved bringing them online.
In Australia, for example, he worked with telecoms giant Telstra to map its equivalent of the Yellow Pages onto the net. This early recognition has propelled these sectors to more advanced digital solutions.
2015-present: Chief technology officer, Nucleus Financial
2012-2014: Platform chief operating officer, Axa Wealth Elevate
2008-2012: Chief technology officer, Nucleus Financial
2003-2008: VP technology and operations, Thomson Reuters
2000-2001: Senior developer, Pingtel
1993-1999: Senior consultant, Logica
I am fascinated to understand how Smith and chief executive David Ferguson, free from the bondage of legacy systems and ideas, built the Nucleus platform.
From the early days, they were focused on what Smith calls “user-oriented design” – finding out what the client wants, then building it. Admirable, yes, but it brought to mind the hackneyed Henry Ford quote: “If I had asked people what they want, they would have said faster horses.”
Smith’s view now is that there is a difference between what the user wants and what they need.
“Our answer was to focus on what advisers needed. And to focus on the right outcome rather than the literal case of what they asked for,” he says.
It also meant that Nucleus had to ruthlessly prioritise the work it undertook. The trade-off was features versus functions. It did not start out building sophisticated tools. While a nice to have, tools were not core to helping advisers achieve the right outcomes.
Smith also recognised early on that technology would become increasingly data-oriented, so the Nucleus platform was set up to use application programming interfaces. This meant third parties could create apps to access the features and data on its operating system. That way, providers could plug tools into Nucleus instead of Nucleus building the tools.
On the future for platforms, Smith says that, while advice is inherently human, the stuff that is not should be tech enabled.
The right platform will help advisers build better businesses and access to platform data is increasingly critical for this. Data offers huge advantages.
Indeed, Invesco undoubtedly sees Intelliflo’s data as instrumental in helping it build a more adviser-centric proposition.
Smith also sees platforms as part of an ecosystem. Interoperability with back office systems, tools and initiatives like open banking and the pension dashboard will be a major focus. As it stands, advisers use multiple systems but they do not link up seamlessly.
In fact, lack of systems integration is the number one challenge for advisers trying to adopt technology, according to our research.
That said, he is firm Nucleus will stick to what it is good at. The platform is simply a component in the ecosystem.
Smith still has the same hunger for technology he did in 1982 when he got his first ZX Spectrum. When I ask him what inspires him, he tells me it is his young team. I suspect he sees the same hunger in them.
Much of the work of the tech teams and developers is behind the scenes but, without their passion and drive, our industry would be rudderless. Sometimes they get it wrong.
But if we combine Smith’s user-oriented approach with the brains of driven young people, the future of platforms looks brighter.
Miranda Seath is research director at Platforum