TrustQuay has announced the release of its latest Future Focus Report which reveals that only one-third of firms in the corporate, trust and fund services sector have started to digitalise their business models and client engagement.
In a global survey of 120 trust, corporate and fund services providers as well as private banks, the survey found that while nine out of ten firms felt they would become much more digitalised and automated in the next five years, only a third of firms had taken the first step on their digitalisation journey by consolidating data and systems onto a common digital platform.
In terms of regulation, three-quarters of firms do not have a single global system for regulatory compliance, even though 86% of those surveyed said that interaction with regulators will become increasingly digitalised.
The sector is currently lagging way behind other sectors of financial services in terms of automation. At present, 87% of firms had not automated workflow processes and three-quarters of those surveyed said they could be better at increasing efficiencies and reducing costs. Profitability is also under threat with only one in four thinking their firm is more profitable than their competitors.
The survey also found that digitalisation needs to accelerate if firms are to meet client expectations. The vast majority of firms, 84%, do not have a client portal in place to offer digital interaction with clients, with three-quarters of firms saying they could do better at delivering a better digital experience.
Attitudes to digitalisation are changing however, with 70% of respondents saying they will likely deploy Software-as-a-Service (SaaS) in the future, and a similar number saying that the availability of SaaS may act as a catalyst for the industry to become more digitalised.
To guide firms on the direction of travel and best practice with regard to digitalisation, TrustQuay has broken down the business challenges identified in this year’s Future Focus Report into four separate steps on a digitalisation pathway – Consolidate, Regulate, Automate and Differentiate.
Commenting on the results of the survey, Keith Hale (pictured), Executive Chairman of TrustQuay, said: “Over the past three years, our surveys have shown an industry that increasingly recognises the need for transformation and wants to embrace digitalisation, but is struggling to take the initial steps. Given industry-wide day to day challenges such as data quality and regulatory burden, it is not a surprise that many firms’ focus is on these front-of-mind issues. As a result, efforts on transformation to enable automation and digitalisation to address significant bigger business issues such as industry consolidation, improving margins and driving growth are being pushed down the agenda.
“We can see and have defined a clear pathway to realise the benefits of digitalisation. We hope that by mapping out the route, firms will gain greater clarity and confidence on the steps of data consolidation, regulatory compliance, automation and differentiation, where each stage delivers significant benefit.
“Digitalisation is definitely coming to the trust, corporate and fund services market – it’s inevitable as it is within any industry. Technology providers such as TrustQuay have a key role to play in guiding firms so that they can realise the full benefits to integration of acquisitions, increased margins and profitability, improved organic growth and ultimately enterprise value that digitalisation and automation brings.”