Sharing knowledge and innovation are some of the topics that really stirred up a lively discussion at today’s inaugural thought leadership event. George Pedra was invited to present Finos’ point-of-view on the topic of the state of technology innovation and adoption in the industry. 

His presentation centred on the fact that there are 3 market forces pulling at the industry right now. These market forces (Commercial, Regulatory, and Technical) are all having a profound impact on the strategies that today’s Corporate Service Providers (CSP) must consider if they are to continue to prosper in the years to come.

The Three Market Forces Affecting Corporate Services Providers

Commercial Forces

Today’s CSPs are under pressure from their clients. Today’s clients simply expect more. More value-creating services, more price/value transparency, and more modern servicing capabilities, such as the ability to collaborate and share. On the latter, we are seeing some mid-, to large-sized corporate clients (e.g. private equity and real estate funds) asking that their staff work on the same content as their service providers – to essentially split upt the work when they (the client) deem it necessary to do so.

Regulatory

This category comes as no surprise to any participants in the industry. Regulations will never go away, and the trend for the sector is obvious: New regulations will continue to arrive at our doorstep, as will changes to existing laws. There is one thing that is certain: Regulations will not lessen or weaken. The trend is evident when you look at the expanded reach of the updated Dutch Anti-Money Laundering (AML) laws to include lawyers, notaries, and real estate agents.

Technical

CSPs are facing pressure from clients and regulators, and today’s technology can make a significant difference to how most Corporate Service Providers address these challenges. The key is to understand which solution fits the problem you are solving. Companies will often end up “over buying” technology. Just look at Excel: How much of this powerful tool does anyone use? 10%? Yet, we all pay for 100% of this powerful tool. In addition to solution-problem fit, and utilization, is implementation. You need to have people that you can rely on and trust in the implementation of any solution so that you extract maximum value. This is ever more important when it comes to the leading edge technologies available today, such as Robotic Process Automation, AI, Blockchain, and APIs.

What were the shared views amongst the attendees?

Those in attendance came to agree that CSPs do recognize the need to change, and see the proverbial ‘writing on the wall — especially in light of recent announcements, such as Intertrust’s acquisition of a technology company. Read our analysis of this acquisition here — but face some short-term challenges.

Here are some of the shared views of those at the roundtable discussion:

  • Most trust companies do the same work (KYC, onboarding, legal reviews, accounting, reporting, filing, etc.)
  • There are inefficiencies in most client-facing processes. For example, the KYC/onboarding process often contains duplication of information and effort
  • The trust and corporate services market has been thrown wide open, and the competitive landscape is changing
  • New entrants, such as legal firms and accountants, can offer similar services and often times without the need for a trust license
  • Large clients are being lost because they are setting up their own offices (the corporate services “DIY” equivalent).

Expectations for the future

And what does the CSP sector expect of the future? Here’s a quick summary of the shared view of what to expect:

  • Trust and corporate services sector has to be more open to change
  • The sector needs more broadly based stakeholder involvement, such as the banks
  • CSPs need to have the courage and foresight to share more information, especially when it comes to Anti-Money Laundering (AML) processes and Know Your Client (KYC) processes
  • There’s a shared sense of optimism because everyone sees the real opportunities available to them today when it comes to improving their operations using modern technology

If you would like to have us present our “3 Market Forces Affecting Trust & Corporate Services” to your office, please reach out to us by email (to george@finosglobal.com), or book a meeting directly here:

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