The tussle to get to the front

The growing size of the front office wealth management technology provision area in Europe is driving an increasing number of providers to review their business strategy in order to get into this space. Excellent example of this trend is the recent initiative driven by Thomson Financial, the global market data provider, part of The Thomson Corporation. Thomson has signed a partnership with Business Architects, a European software company focused on solutions for the financial market place, with the aim to create a fully integrated front-office solution for European wealth management firms. “We estimate that the value of the front office wealth management technology area in Europe is about $500m (?395m). This is a pretty significant market opportunity for us,” says Julian Chaffey, European wealth management director at Thomson Financial. The integration between Thomson’s desktop application, Thomson One, with Business Architects’ front office workbench, eXimius, aims at creating more efficiency in the day-to-day task of the fund manager. Practically, all the real-time market data, research and content provided by Thomson are fed to the front-office Business Architects’ software, this way enabling real-time streaming use of the product. “If, for example an event raises questions about the holding of a particular asset, our integrated solution enables portfolio managers to find out instantly what the potential exposure to this asset is across their clients’ portfolios,” says Mr Chaffey. The system will then suggest potential changes to the client’s investment based on that particular information. “Users will have a single desk-top and, as the two products are exchanging data automatically between each other, there is no information to be re-keyed into one or the other,” explains David Wilson, sales director of eXimius. “You get increased efficiency as you are automating processes which were previously manual,” he says. An integrated solution of this type will therefore allow managers to manage more clients more effectively, says Mr Wilson, enabling firms to offer sophisticated services even to the mass affluent market. New kind of service “What we are finding is that more and more investors are asking for more sophisticated management of their money, even though, traditionally, that kind of service will be offered to the high-net-worth end of the market,” says Mr Wilson. “An organisation cannot normally give a high-net-worth service to the mass affluent market, because it costs too much,” he says. “But if you can automate that type of service, then you have a huge value proposition, because you can acquire more assets under management and faster.” Thomson’s integrated offering covers all aspects of client management, ranging from client acquisition and due diligence to customer relationship management including profiling, portfolio management, performance measurement and reporting. Current dynamics in the market place are certainly placing a new emphasis on wealth managers to be more efficient in recording ‘know your client’ information, such as the new MiFID regulation, due to come into force next year. Also, the high number of acquisition activities among wealth management firms is forcing firms to be more competitive in the services they offer, says Mr Chaffey. “Each firm is looking to differentiate itself to seek market share amongst their target clients.” The new integrated offering builds up on the expertise that Thomson Financial has gained in North America, where the company developed its own integrated work-flow solution, implementing the rollout of 23,000 stations at more than 550 Merrill Lynch offices. “We are a major software developer in our own right, but the European multi-language and multi-currency requirements drove us to look for a partnership with Business Architects, whose solution was ready to be sold and used, rather than localise what we were successfully selling in the US,” says Mr Chaffey. “The partnership was about time to market and the best solution for this audience.”