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Modernizing Operating Models Is Key for Boosting Growth

By Alex Padalka June 27, 2018

Financial advice firms who want to add a couple percentage points to their growth levels should modernize their operating models, according to a recent report from FIS.

The top 20% of firms across the financial services industry have grown at an average of 3.88% over the past 12 months, compared to 2.12% for the rest of respondents to FIS’s survey of more than 1,500 C-level and senior executives across buy-side, sell-side and insurance firms.

And 39% of the top firms saw revenue growth of more than 5%, according to the survey. The top firms’ assets under management, meanwhile, grew 3.9%, compared to 1.85% for the rest of the industry, FIS found.

Among banks and broker-dealers, 80% of the top firms have made improvements to data quality and distribution, according to the survey. Meanwhile, improving customer experience and introducing new digital products and services are the top drivers of banks and broker-dealers’ digital investment, FIS found.

The key “pillars” to modernization in general are digital innovation strategies, where financial services firms overall have scored the lowest, followed by automation and emerging technology, according to the survey.

Eighty percent of the top firms overall have fully- or almost fully-automated essential processes, compared to 46% for the rest of the firms, FIS found.

The top financial services firms also performed better in data management, client value and risk management, according to the report. The leaders are also more likely to want to outsource their IT: 50% of the top firms say they want to significantly cut down on their owned IT infrastructure over the next year, compared to 38% of respondents overall, FIS found.