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Following a trip to Amsterdam in November 2016, Objectway chose somewhere closer to home for its latest customer conference, OWIN18. Rome, la città eterna, played host to around 150 delegates (and a small gathering of press) as they discovered what the Milan-based wealthtech firm had to offer.

A show of hands early in the proceedings revealed that a good proportion of those in the room were from UK-based companies. That’s not too surprising, as Objectway has been steadily ramping up its customer base in London for the past few years, especially following the 2015 acquisition of Rhyme Systems (more on that later).

Luigi Marciano, CEO of Objectway, opened proceedings by channelling the spirit of the great artists Rome has had the fortune to host. Objectway, he said, aims to be the new Michelangelo of financial services. Today’s wealth market is offering firms a sink or swim option, he added. “We are moving towards an age of digital destruction or digital renaissance”.

Marcia più alta

How can the wealth management industry, which has a (some would argue) well-earned reputation of innovation-averse strategy, kick itself into gear? Thomas Zink, associate research director at IDC, presented the audience with some facts and figures.

According to IDC research, 55% of banks and firms are in the middle of the digital transformation scale. This, said Zink, was not necessarily a good thing. Many are stuck in the middle of a “digital deadlock” in which they have no idea how to escape. Outdated KPIs, poor tactical plans and limited expertise, among other things, are holding back firms from properly embracing the digital age.

A few years ago, Zink revealed, IDC predicted that every wealth manager would be using the much-touted “hybrid model”, combining suites of machine learning and robotic process automation with a human touch to create value. He admitted that perhaps IDC was being a little bit too conservative, as there has been a surprising level of adoption.

Still, though wealth managers have been keen to embrace the change, it seems that not many of them actually know how well they are doing it. A Capgemini study from 2017 found that although 53% of firms in their survey reported utilising a hybrid model, most didn’t rate their abilities. When asked to rank their progress out of seven (a strange scale, admittedly), they only gave themselves a three or four on average.

Artificial intelligence, Zink stated, is certainly the way forward, but is best implemented alongside tried and tested traditional systems. Firms shouldn’t go out looking to reinvent the wheel when the tools they have at their disposal are already a great base to build from.

Besides, people are still slightly reluctant when it comes to being told what to do by a machine. More IDC stats showed that though between 50% and 60% of users would be happy to chat to a machine or chatbot, that same demographic would also not be happy being given tailored advice generated by algorithms and machine learning.

Closing, Zink added that by 2020, top tier banks will start working towards a new model of “connected” core banking – essentially bolting on lots of APIs onto a legacy system to help it communicate with newer systems. That solution, he said, will probably have to suffice until a new generation of core banking systems become the norm.

Careless (wealthtech) whispers

Peter Schramme, Objectway’s business development chief, took to the stage to simultaneously harangue and inspire those in the room. “Wealth management is one of the least developed banking sectors when it comes to digitisation,” he said. “None of the most innovative companies in the finance industry are wealth managers.”

Yet there is some hope. Mass personalisation of services is a conclusion just around the corner. Companies will begin to create “a factory-style service for an audience of one”. Technology, Schramme added, should be like a good butler – present when needed and invisible when not. At the same time, he argued, there is no “one size fits all” solution – firms need to pick what’s right for them, and not what’s right for their competitors.

Alberto Cuccu, chief product officer at Objectway, picked up from there. The firm, he said, aims to serve both traditional players and new challengers. It’s not just enough to go by the numbers anymore – companies need to understand that a new paradigm is here to stay: aiming to make a positive impact on their client’s lives.

Almost before anyone could say “but isn’t that a given?”, James Brown, head of client services at Compeer, conducted a stats attack to keep people awake prior to lunch. 67% of wealth managers in the UK target a growth in assets of 15% per year, while 90% believe they can achieve this growth without affecting profits in any way. Compeer reckons that only around 40% of them actually have a sustainable model in place.

When it comes to that aforementioned “new paradigm” they’re falling behind as well. 30% of those contacted b Compeer didn’t measure their client centricity in any meaningful way. 50% ran surveys, arguably the most basic of feedback vectors, and only conducted them once every one or two years. Despite that, 100% said that delivering an end-to-end customer service was crucial. It’s enough to make you use the shrug emoji.

Rhyme and reason

The UK contingent in Rome was significant, and Schramme, in an interview with IBS Intelligence, confirmed that around 40% of the company’s business now comes from the Brexit-bound country. When asked whether this was due to the acquisition of UK firm Rhyme Systems, bought from disinterested owner 3i Infotech in 2015, Schramme gave a shrug. “We were already well established in the UK [from the acquisition of the Eximius system from Thomson Reuters in 2012] but certainly, the Rhyme deal helped,” he admitted.

Rhyme Systems, which had been a fairly dormant company at the time of the buyout, was ready to launch its new Illumas wealth management system. Objectway absorbed the new product along with the business, and busily began shifting Rhyme clients across to the new software. Users of Rhymesight and Quasar, systems more than a little outdated, were offered an immediate migration path.

Rhyme’s existing client list, at around 30 firms, included the likes of Rathbone Brothers and Nedbank Private Wealth. Schramme confirmed that all have now been migrated to Illumas in a process that was completed in the summer of 2017. As for the future, Luigi Marciano, also in conversation with IBS Intelligence, revealed that clients would be offered the opportunity of shifting onto the firm’s “comprehensive” suite of wealth options in the near future.

An ecumenical matter

Away from the conference proper, guests and hacks were treated to a guided tour of the Vatican museums, which left many (uncharacteristically) speechless. Not even the most prevalent of industry chat rent the silent air of passages and galleries filled with religious artefacts, artistry and history. The tour concluded with a gathering within the Sistine Chapel itself – a sight I’m sure not many will forget, even after being brusquely told by wandering security guards that no pictures were allowed within Michelangelo’s famous sanctuary.

The Villa Miani, traditionally a wedding venue, offered exceptional views of the Rome cityscape below, and was well placed to give attendees a chance to reflect on the lessons learned during demo sessions and from presentations. Despite intermittent weather, one event-goer remarked that the show had been an excellent learning experience and added that they would be looking forward to next year’s showcase, wherever that may be.

Interviews with Peter Schramme and Luigi Marciano will be featured in the IBS Journal April edition.

by Alex Hamilton
Alex is Senior Reporter at IBS Intelligence, follow him on Twitter or contact him at: alexanderh@ibsintelligence.com