Why Vendor Integration Could Be Your Perfect Solution
Is there a perfect technology? Is there a perfect “system,” for a business? Look around you; ask the people at your company and how they feel about the technology or the systems that they use in their everyday lives. I can almost guarantee you that someone in your company has something smart to say about the system or technology that is currently in place. Unfortunately, there isn’t a perfect system for every business. Why?
Each business or industry conducts its operations differently from one another, period. A large organization can decide to build their own technology and that takes months and months of planning, budget, politicking around the office and by the time a product is live, the market has already moved on.
Businesses that choose to license technology are making decisions based on the desired outcome and a series of “wants,” and settling for a vendor that has the majority of these, “wants.” Why?
In wealth management, for example, there exist technology vendors that are great at specific aspects of the wealth management process from market data to research and analytics to client facing portals to compliance, etc.
Recently, a colleague in the wealth management industry shared that a large financial institution is in the market to digitally transform its business; modernizing the onboarding process; redesigning the interface to increase customer engagement; recommend and deliver model portfolios with the goal of driving the customer and financial advisor experience and attracting AUM. The fintech company that my colleague is employed with doesn’t have all the capabilities and requirements or the inclination to deliver on all aspects of the project. When it came time to submit the RFP (Request for Proposal), a suggestion was offered to the financial institution to invite vendors who are specialized in specific aspects of the project and collaborate on delivering a game-changing solution. The basis behind the suggestion was that if the fintech vendors were allowed to cooperate together instead of competing for the deal, then, the financial institution would benefit the most, as the solution would incorporate the best of all worlds.
The suggestion was quite genius, actually. Having multiple vendors collaborate and seamlessly integrate the technologies would form a perfect solution and be game changing in the wealth management industry.
This story doesn’t end well. The financial institution was adamant on having each fintech vendor submit a RFP and was not open to a digital collaboration between the vendors. What does this mean for the financial institution?
As we all know, the financial services industry, which includes banks, insurance companies, asset managers and brokerages have been the slowest to modernize and will be subject to the largest industry disruption and quite possibly the largest exodus of clients to newer, more client centric companies if they do not change and do it quickly. By not allowing the fintech vendors to collaborate, the financial institution is arguably accepting the fact that the solution they envisage to rollout to its customers will be a half-hearted attempt at modernizing and will fail at improving the overall customer experience and ultimately lose market share.
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