TrustQuay’s 2023 Future Focus Report is the result of a global survey of 120 corporate services providers, trust and fund administrators, wealth managers, private banks, and family offices.
As with previous surveys, the aim was to identify the drivers of change and the key challenges facing companies that operate in the sector. For the third year running, it revealed that the top three business challenges faced by the sector continue to be regulatory burden, improving efficiencies/reducing costs, and improving data quality.
Yet despite acceptance that all of the above can be overcome by the digitalisation of business models (82% of firms acknowledged that digital migration has to accelerate) the vast majority continue to rely on outdated manual processes.
The question remains, if the sector is fully aware of the urgent requirement to upgrade and automate their systems, why are so many still failing to act?
The arguments for digitalisation are clear to see
The feedback shows that firms recognise the need to transform their business by leveraging technology, but are unsure how to justify the business case, the likely return on investment, and ultimately how to execute the transformation itself.
In order to assist firms on how best to argue the case for the digitalisation journey and the many benefits that it brings, the business challenges can be broken down into four separate steps – Consolidate, Regulate, Automate, and Differentiate.
Consolidate. By consolidating data via a common digital platform, it will improve the quality and consistency of data. This will result in reduced data silos, a common understanding of how data flows through the organisation, together with improved transparency, accuracy and control for reporting, data and information.
Regulate. Migrating to a single compliance platform will enable firms to execute their regulatory obligations far more quickly and easily. It also reduces the complexity of systems, improves the efficiency of the submission process, and reduces both the risk and cost of compliance.
Automate. Automating key compliance, regulatory and operational workflow processes have proved to increase efficiencies and reduce costs. Not only does automation ensure peak operational efficiency, it also reduces payment costs and pressure on fees and margins. Furthermore, it increases revenue while improving profitability.
Differentiate. Differentiation creates a competitive advantage and helps drive growth. This is increasingly important as the intergenerational transfer of wealth is now moving to ‘digital native’ generations who expect the same level of technology, speed of response, engagement, and client service that they experience in other sectors and life in general.
All the above combine to make a compelling argument for every TCSP to embark on their digitalisation journey without delay.
It is widely recognised that TCSPs are under increasing pressure to lower costs as well as eliminate any obstacles to profit margin maximisation and efficient regulatory compliance.
The single most effective way to achieve markedly lower operational costs and drive compliance performance is quite simply to replace manual and underperforming processes with the latest automated technology.
How a leading TCSP embraced digitalisation and is now reaping the benefits
Oak Group is a private client, corporate services, and fund administration business that recently digitalised their compliance processes across multiple offices.
Previously, some offices were employing outdated processes that required their compliance teams to spend a great deal of time visiting multiple sanctions and watch list websites, then manually collating all the information.
Recognising that these processes and procedures weren’t fit for purpose, the Group Chief Risk & Compliance Officer made the decision to fully update and automate the compliance processes for every office in the group. The resultant solution has completely transformed the entire group’s outdated screening processes into a comprehensive automated digital solution.
Unlike the cumbersome, disjointed processes employed previously, the new solution now delivers a universal view of risk that is shared by all the offices across the group. Equally importantly, it has provided every single user with an intuitive and clear window into the risk profiles of their clients, and a single source of truth for all stakeholders regardless of their geographic location.
The new digitalised solution delivers a far clearer picture of the business’ exposure to any watch-listed or sanctioned individuals and entities, politically exposed persons (PEPs), and any adverse media associated with clients.
The benefits were immediately seen across the entire group.
Whereas the previous blanket approach resulted in the compliance teams having to wade through thousands of false positives, the new solution quickly and clearly identifies the high-risk individuals and entities.
“We took a compliance team through the process we used previously and came up with no less than 600,000 hits. When we did the same exercise using RiskScreen, the result was just 12 clear hits. Its ability to massively reduce the number of false positives has saved us countless hours of toil and frustration.
~ Catherine Pigeon, Group Chief Risk & Compliance Officer
Furthermore, the level of risk across the entire group is now fully catalogued and visible to all authorised users. It also enables the business to clearly demonstrate to any regulatory bodies that it is taking all the necessary steps to screen for potential risk.
With cost efficiencies in mind, the new solution doesn’t require a seasoned compliance professional to analyse the results. In fact, because of its flexibility and ease of use it produces intelligent outputs that most parts of the business can interpret.
“The ease of use of the solution means that it is no longer such a specialist task. Thanks to the unlimited user licence, we have been able to spread the workload across our teams, and not rely solely on our compliance members.”
~ Catherine Pigeon, Group Chief Risk & Compliance Officer
To add to its appeal, this leading-edge solution does away with the complexity of having to manage multiple processes by delivering a single package, from a single supplier, under a single licence.
Last, but by no means least, Oak now has the peace of mind that every office now has in place a world-leading screening solution that is ready to meet both present and future challenges.
How RiskScreen can help you on your digital transformation journey
The mounting pressures on TCSPs and their compliance departments means that it is now crucial that they embark on their digital transformation journey without delay.
Yet even though the technology is already widely available, many firms are still reluctant to embrace it.
Much of this reluctance can be attributed to a fear of the unknown. What solution is right for my organisation? How can we migrate without disrupting our day-to-day operations? Will we receive sufficient training and support? And perhaps most importantly, what vendor can we trust?
RiskScreen can provide you with the answers to all your questions and deliver a complete end-to-end digital solution that is proven to deliver the efficiencies and cost reductions that you so eagerly seek.
With flexibility in mind, you can choose individual modules for specific needs as your business requires or install the complete package for a fully integrated solution.
Whatever your requirements, you can rest assured that your processes will be immediately transformed, with full scalability in order to future-proof your needs.
To find out more about how RiskScreen can help you on every step of your journey, request a discovery call today.