In today’s world, every financial professional has a different tech stack. If a financial advisor...
Collaboration between FinTechs can make for a better overall proposition for advisors says Ali Qureshi, Co-Founder, SideDrawer
Much has been made of the need for wealth managers and FinTechs to work together, collaborate to further the tech cause, enable banks to make the most of what they have, and add on new systems and tools to fill gaps.
This has evolved into a tech approach that runs around ecosystems of component parts. Essentially this relies on having a solid architecture that allows a platform to integrate and communicate with many different pieces to provide the wealth manager with all the component parts to make the whole.
On the surface, this is a great idea. It allows agility in that the wealth manager can build a tech infrastructure and ecosystems pointing to its exact needs and business processes. For FinTechs too, it is a worthwhile evolution. The off-the-shelf, one size fits all tech vendors' days are limited. Wealth managers want flexibility and need to leverage the many tech solutions out there. In doing so, they can provide a service level that is differentiated and efficient in terms of manpower and cost.
There is no doubt that is happening. A cultural acceptance of the need for change means that
wealth managers, facing an increasingly competitive landscape, are actively seeking out FinTechs. They know that the right partnership will provide the tech solution itself, as well as the benefit of the FinTech's experience in defining the ideal end point, the journey to get there, and what the end result should look and feel like in terms of function and process.
FinTechs, in turn, gain from wealth managers' scale and the ability to work together to make new products and services. They can then hone their own offering and pass their experience on to new clients.
But what about partnerships between FinTechs? This too makes sense for both wealth manager and FinTech. Indeed, in an era where FinTechs have proliferated, it is tough, if not impossible, for wealth managers to have a good handle on the market and to know what fits in where and which solutions are a true value add not just on their own, but in their ability to properly integrate with other solutions,
Small specialized FinTechs can also struggle to be seen. Partnering with others offers a way to become an important part of a more extensive offering- be that white-labeled or not.
Indeed, ready-made, cut-and-paste solutions may not exist for some problems, but new solutions can be formed in a partnership if the FinTechs can come up with a clear joint proposition that meets the customer need.
The key question is to ask if, by working together, two or more FinTechs offer something that adds value and demonstrates a clear use case benefit for the client. And can they seamlessly offer that combined proposition so that the customer is served in a convenient and easy-to-use way?
The collaboration between New Outlook Wealth and SideDrawer is one such example of this. New Outlook Wealth
looks after the financial needs of families, professionals, and business owners across Canada. It offers quality advice and access to products and services for clients at a fair price, separating the advice and money management components so that its advisors focus entirely on clients' financial planning needs.
SideDrawer meanwhile offers and secure document storage and communications portal. It adds to the proposition offered by New Look Financial as it enables their end clients to better manage document storage and communications between family members and relevant professionals such as tax advisors, lawyers, and corporate planners.
It works because the two are providing specific services so the partnership is of mutual benefit rather than there being a Venn-style overlap and thus the potential for cannibalization.
The two parts of the whole are complementary and offer a more compelling offering to potential clients looking for best of breed and holistic tools,
SideDrawer has also leveraged relationships with other providers. An API integration with 8Twelve Mortgage and SideDrawer's document collaboration platform means that Side Drawers professional users can refer their clients to 8Twelve's mortgage brokers, apply for, and ultimately provide the required mortgage documents, all from within SideDrawer's secure platform.
This is a particular value add as the mortgage application process can be drawn out with countless e-mails and even paper documentation being sent and received.
Once the financial advisor initiates the referral, they can see the application by SideDrawer's activity tracking. The advisor can use that information to make changes to other relevant documents such as financial and estate plans.
As with the New Outlook Wealth collaboration, the idea is to eliminate the security issue and provide a way to more efficiently manage documentation. All interested parties can easily access the paperwork when they need to and see, at a glance, where a process is up to using SideDrawer's Information Request API. It combines a dynamic form and guided file request into one simplified function.
Collaborations such as these allow a better overall service to end clients and allow professionals to get on with their jobs more efficiently. Two precious things indeed in a world where the double-edged Damocles' sword of client retention and cost to serve are ever-present.