Home Insights Achieving scale in wealth management through innovative technology automation

Achieving scale in wealth management through innovative technology automation

Blog, Wealth management administration 09/05/2024

We chatted with our UK Head of Product Management, Andy Boniface, after hearing his praise for Composer’s automation capabilities. Now that we’ve heard the numbers, we know why!  

Assets under management in the global wealth management market are expected to grow to £118 trillion in 2027, according to Statista Market Insight(i). With a continued challenging global outlook, competition for customer assets will be fierce and delivering a personalised and efficient service in a low margin environment that also increases profits as assets grow is essential. 

Efficient and scalable business processes are crucial in wealth management administration, but equally so, is driving automation to use technology to do repeatable processes and focusing employees on value-add activities, such as optimising the service delivered to customers or enhance the future proposition.  

So, we took a look under the hood of Composer, GBST’s wealth management administration platform, which currently manages over £250 billion of assets across more than five million active accounts. We wanted to see what kind of automation we would find. In an entirely unashamedly promotion, the numbers tell a great story.   

During the calendar year 2023, over 17 million business processes and 45 million trade instructions were completed on Composer across all GBST UK clients. Of these, 94% of business processes were fully automated with no manual intervention required and 96% of trades were ordered and settled automatically. Clearly this demonstrates the platform’s ability to drive efficiency within wealth management administration and in fact, the exceptions are related to market inefficiencies around automation and not Composer’s capability.  

Automation in trading? 

Trading is a prime example of how using automation can streamline administration and help wealth management organisations scale. Composer has extensive automated trading capabilities. It processed instructions totalling over £41 billion last year in the UK alone, with over 99.7% executed via automated methods and 92% settled automatically. By seamlessly aggregating, sending and disaggregating the trades, then reflecting them in the applicable investor’s account, using technology a huge amount of manual legwork is removed. And while some exceptions that can’t be processed automatically will always exist due to the lack of automation available within the market for certain asset types, a wealth management platform like GBST’s Composer can identify and pass these exceptions to an administrator for review, making the resolution of issues easier and quicker. 

Improving business processes 

Alongside its trading capability, Composer also has more than 120 configured business processes available to help organisations streamline their administration. Just two of these account for almost three-quarters of all automated processes undertaken on the platform: contributions (47%) and client personal detail updates (25%).  

Managing one-off and regular contributions into pensions and investments safely and securely is a significant part of a wealth management organisation’s remit. Once a contribution instruction has been initiated by an adviser, investor or automatically – for instance through a regular saving plan -Composer removes the administrative burden by handling the rest of the process. This includes tracking the bank payment, matching it with the expected bank credit, allocating the funds to the correct account, investing in any specified products, funds, or model portfolios, and deducting related charges. As Composer has handled the whole process, all associated payments and charges are also reconciled with the physical bank account automatically. 

Similarly, updating client details represents a huge administration task, but configuring them to occur automatically within Composer removes the manual effort. The Composer API allows GBST clients to link their self-service digital proposition for advised, direct, and workplace propositions to Composer. It allows changes to be entered into a user-friendly web front end by advisers, investors, or other authorised parties and validated online without the need for additional manual checks, before being passed through to Composer for automated processing. Once the instruction has been processed, subsequent events, such as issuing customer notifications or letters, or uploading them to an online portal are triggered automatically, removing the need for administrators to complete follow-up tasks. 

Understanding the exceptions  

While Composer automates most trades and business processes, there will always be exceptions needing manual intervention. How technology such as Composer manages these circumstances is equally as important. 

Certain actions within the wealth management journey are complex or sensitive, for instance, when an investor dies or divorces. This is where hand holding the instructions through to completion are often needed. For these exceptions which represent around only 2% of the volume of Composer business transactions, organisations understandably prefer to have human oversight. However, automation doesn’t need to be all or nothing. Composer can be configured to include steps within the automated processes that prompt administrators to undertake manual checks or approvals for specific scenarios, helping improve efficiency even for more complex or sensitive tasks. 

Other exceptions are more easily avoidable, particularly where the automatic process relies on information from external parties. In 2023, nearly five million individual contributions and payments from GBST’s UK clients, totalling £27 billion, were processed through Composer as new contributions into products, or, as transfers in/out, pension income payments, lump sum withdrawals, and death payments. Over 89% of these contributions were automatically matched with physical money in the bank account within Composer.  

There are times when references from third parties do not always tally with provider data, and this can cause delays. To maximise automated matching and contribution processing, Composer enables organisations to define highly configurable rules that look at a range of identifiers rather than just a single reference. These can be continually improved with new scenarios and tolerances to increase automation and reduce manual overheads. In addition, if a reference doesn’t agree exactly with the matching rules, Composer can suggest matches for an administrator to more easily confirm manually. By improving the configurable matching rules in Composer, this percentage ticks upwards for providers, enabling them to significantly increase efficiency and their ability to scale operations effectively.  

For payments out that are generated via Composer, we see 100% of these automatically processed and reconciled. 

Innovation is more than just a single idea; it is found in small, incremental changes too. Wealth management organisations are already enjoying high levels of automation within their business processes, but we’re continuing to evolve and adapt Composer to support ever-greater automation and efficiency to help businesses cut costs, reduce risk, and build scale.  

If you think these numbers tell a good story, you really should take a look at Composer in action! Demo?

Posted in: Wealth Management Administration

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