Trends Shaking Up Financial Services
The most significant trends in the financial services and fintech sectors over the
past year have included greater adoption
of the cloud and other digital technologies, commission/fee compression and
consolidation, according to Fred Duden,
global head of product development
at fintech firm Broadridge Financial
Solutions. And he predicted those trends
will continue in 2020.
The shift in recent months to commission-free trading by firms including
Charles Schwab, Fidelity, TD Ameritrade
and Wells Fargo means that “we’re
seeing a [larger] focus on managed
accounts, rebalancing and how” these
firms can “compete from an advice
At the same time, major players in
financial services are “looking at how
they can leverage” digital technology and
hybrid, omnichannel strategies, he said.
In particular, Duden predicted there will
be a “continued focus” by financial ser-
vices and fintech firms on digital technol-
ogies that help them optimize workflows
for advisors and clients. “The industry is
realizing that digital is about attraction
and retention of clients,” he said. For
example, he pointed to the convenience
of online bill payment as one way that
banks are retaining their customers. “All
your bills are set up there. Everything’s
cohesive [and] it’s easy,” he noted.
Wealth management firms are increasingly realizing they can use
similar methods to retain customers through mobile apps
on customers’ cellphones and
websites on computing devices in general, Duden said.
With artificial intelligence
and machine learning adop-
tion, meanwhile, “it really
comes down to defining the
use cases that are appropri-
ate for” a financial services
firm to use those technologies, as well as
blockchain, he said.
One factor that could be playing a role
in how quickly firms in the sector adopt
those technologies is whether they have
the infrastructures in place to support
them, he noted.
“A lot of clients are going through a
modernization” that often includes “cloud
journeys associated with upgrading and
modernizing their stack of technology
that they use — both from an application
tier and from an infrastructure perspective,” he explained.
“From my experience,” he said, companies “that would have said ‘no way’
five years ago” to embracing the cloud
specifically “are saying ‘we’ve got to look
at this’ and actually [are] moving quickly
to leverage the cloud for certain areas”
now, he said.
Five to seven years ago, “it was security, security, security” that organizations were concerned about most if they
embraced the cloud, Duden stressed.
But companies have “gotten a lot more
comfortable with the construct of how
the cloud works and from an infrastruc-
ture perspective and its security, and the
security of the applications that they may
be putting into the cloud, so there’s been
this slow movement to it,” he said.
Also expect more industry consolida-
tion in 2020, Duden said. Broadridge has
acquired seven firms in 2019 alone, he
pointed out. “A big focus for us” in 2020 is
going to be Broadridge’s wealth platform
and its partnership with UBS, he said, add-
ing: “We are really investing heavily in our
wealth platform and the capabilities asso-
ciated with that, around [areas including
the client] front-end experience, enhanced
trading and rich communications, auto-
mated account servicing tools to allow for
industry solutions for our clients and then
the advisor experience.”
The firm will continue to ask how it can
“make the advisor more efficient” and
create a “best-in-class front-end wealth
management experience for the advisors,”
and then “enable real-time multi-asset,
multi-currency servicing for the enter-
prise to efficiently manage their business
across the wealth platform,” he said.
In a recent Broadbridge survey of more
than 400 advisors, it found that 21%
identified themselves as growth-focused
advisors (25-49 years old) who were
spending more money on marketing and
acquisition of clients than their peers.
That underscored another ongoing
trend in the sector: its aging population,
Duden said, adding: “Part of our investment in the wealth platform is to” enable
what the next generation of advisors are
going to need to be able to run their businesses. —Jeff Berman
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