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[Video] Wealth Management: A Quick Q&A with Paul McNamara

Author: Chet Velani
20 August, 2019

In November this year, we'll be attending the Global WealthTech SummitOur CEO, Paul McNamara will be part of a panel of experts discussing digitally transforming strategies for wealth management firms and private and retail banks. We caught up with him to get his thoughts on some of the latest financial services industry questions put forward and how EValue is addressing them.


How have APIs improved digital transformation, particularly with investing?

The investment market is now changing hugely. We're seeing a lot of new technologies, and new ways of collaborating. I love the way APIs are making it much easier to transmit data logic algorithms between different companies. At EValue we found really new creative ways of collaborating with clients using our APIs. We've found ways of integrating with front-end guidance systems, with advisers, with the workplace, at the front end of people's technology or, at the back-end for compliance and reporting- and using the powerful calculations that EValue has can bring new propositions to help our clients grow their business, or to reduce their costs of doing business, or indeed to reduce the risks that they have when they are trying to put best practice and great outcomes out into the market.


How is the online investing space changing?

The online investment space is changing dramatically. You can see that particularly for those clients who want a DIY, use it themselves type approach. But increasingly and much more interestingly we're seeing the advised market now moving forward where advisers are using new tools to improve the quality of the advice they're giving, and to be more creative in making new information or dashboards, or portals available online or through mobile devices to their clients so that there's much more flexibility in how they interact and the service that they can provide to their clients.


How will PSD2 Open Banking change online investing?

We're seeing huge benefits already from open banking or PSD2, which is the European equivalent. Although we're only at the very early stages, consumers are now being able to use their banking data in much more creative ways; giving permission to new data providers and new propositions to help them in their budgeting, to help them spot patterns in their banking, and increasingly we're seeing people even more creatively looking at using that information in financial planning, in thinking ahead about budgeting for retirement as well as short-term needs, paying down debt etc. What's really powerful is when consumers can compare their own financial circumstances with others, benchmark how they're doing and spot opportunities to improve their future and to take better choices in how they manage their money.


Should there be more collaboration and sharing of customer investment data?

The industry's changing quite a lot in the level of collaboration that we're seeing. We see that at EValue, where we work with a wide variety of clients. But the fact that data is now easier to process, there's greater acceptance of standards for sharing data, the cloud has become much more acceptable in hosting data externally to businesses; and indeed the flexibility to get Best of Breed technologies into an organisation is reducing costs, speeding up innovation, and allowing people to feel more comfortable to experiment and change the way that they're doing business and this is really important as you're thinking through how to compete, how to stay ahead of consumer expectations rather than behind and to delight and attract and retain clients, which is now so crucial for survival in the industry.


How does robo-advisory differ to robo-investing – what should financial institutions focus on?

It's an interesting question about the difference between Robo advice, or Robo investing, or other uses of that term. Clearly there are some propositions which are geared up to help people make very simple choices. Which fund should I buy? What choices should I make for a very particular need? But the really interesting part of the market is how advisers and face-to-face channels can now embrace technology using better tools, using better processes, using data in more creative ways so that there's simpler engagement with consumers. So advisers' productivity can be improved, and so the risks of doing business can all be enhanced as well. What's even more interesting is when different channels can be brought together so the customers' journey online or face-to-face, or through a call centre can be seamless, can capture previous conversations or inputs they've given where the costs of collecting data or acting on previous instructions can all be made more effective and more cost effective.


Why is it important for financial institutions to update their investing systems and offer an automated and more personal approach?

There's been enormous efforts made in parts of the financial services market to embrace new technology and to update propositions. It's clear in payments, it's clear in insurance, it's clear in the back-end systems of banks and investment banking etc. What's now beginning to happen is asset management and long term savings and financial planning are starting to embrace the opportunities and changes that they can make using new data, using new algorithms, collaborating with best-of-breed suppliers or technology partners in the market- and that is now beginning to make a big difference. It's crucial for the survival of firms and the competition with new entrants to really stay one step ahead of where consumers are going and to use new technology that's now lower-cost, more acceptable and more standardised across the industry.


How is EValue helping companies with these services?

EValue is helping clients in quite a number of different ways. What's really interesting is we see clients in the workplace, in branch based clients, online advisers, asset managers- and we're seeing changes to different propositions being made available to consumers. That ranges from how assets are put together, what type of portfolios are recommended to individuals. It ranges into how financial planning and goals can be made more accessible to consumers, making advisers more productive. And also engaging people about their pensions or their investments or other long-term saving choices in a way that wasn't possible only a few years ago. We're particularly interested in how income drawdown and pensions in retirement will work. Consumers are now facing, as they retire, enormous, difficult choices on how they will make their income last, how they will look at the full resources that they have available to them as they contemplate retirement. Should they work for longer? What should they do with their house? What should they do with debts that they have? What should they do with various pensions that they have accumulated over time? EValue is really excited about helping our clients, whether they're advisers or whether they're asset managers or whether they're benefit consultants and indeed employers to really help consumers who are now facing that big level of choice.


Are there any regulations which need to be implemented to ensure robo-advisory is safe for consumers?

The regulatory aspects are very, very interesting in all of this change. And I'm delighted that the UK regulator is enthusiastic to encourage innovation and competition in the market, while of course being concerned that the best outcomes are achieved for consumers. So it is often said that regulation is a constraint, or a bar to innovation, but it is simply not true. If organisations are using the latest technology, the latest consumer feedback, and using best best-of-breed technologies, or suppliers in the industry, much more change can be made. Better outcomes can be achieved, and better economics can also be achieved for industry players in the market.


If you're interested in finding out how EValue are helping to address the challenges facing wealth management and the wider financial services industry, join us at the Global WealthTech Summit on 5th November 2019. Or, get in touch with us, here.