To read part one of this guest contribution please click here.
Guest Contributor: Andrew Peddar, North American CEO of StatPro
Creating a bright future
Investors are anticipating growth as the shockwave of the Great Recession settles. Cloud-based technology is well-positioned to handle RIAs ambitions because it provides productivity gains – the service can be accessed at anytime anywhere via the internet, doesn’t require many resources to implement (for instance, you don’t need an IT team) and benefits the end client immediately. The result is a perfect balance between automation, scalable growth, better client services and actionable analysis.
The cloud is “always on” and available to provide quick answers to client queries. This technology gives investors and their advisors a new way to communicate internally and externally as the information can be shared in the cloud.
Concerns in the cloud
The main concerns associated with cloud adoption are security, reliability and integration. Most importantly, modern day data and analytics systems for RIAs consider security a top priority for data integration and reconciliation. Making certain your technology partners are undergoing audits, like SSAE 16, ensures that you’re working with vendors who have taken the proper safeguards for hosting or processing data that belongs to their clients. When evaluating vendors, RIAs should add these types of certifications to their checklist of evaluation criteria overview.
As for reliability, outages are the exception rather than the rule. If you’re properly evaluating a service provider you’re looking at whether their outages may have been over the last five years. When IT executives have an honest look at their own internal systems, they see that the outsourced vendors and these types of cloud services are significantly more reliable than traditional land based systems.
Choosing a solution that can integrate with other technologies that are already in place is a chief concern, which is why open, web-based platforms that utilize the latest technologies are becoming a more popular alternative to legacy or proprietary systems.
Making the move
Technology’s success in winning RIAs’ hearts will be accelerated by cloud-based technology in the coming years. The benefits of faster, easier and often cheaper cloud-based and SaaS technologies will help strengthen this bond.
Perhaps the power is in the hands of RIAs’ clients. We live in a world where consumers are accustomed to using iTunes, Amazon and other cloud-powered services in their personal and professional lives. These technologies have created a new customer expectation for service expediency.
As their clients’ preferences change, RIAs must respond with anywhere, anytime accessibility of cloud-based platforms that support increased performance and transparency in managing portfolios. Rather than tying firms down with licenses and hardware, the cloud lifts up RIAs to be able to compete on a new level with the big firms.
It’s hard to imagine a future in which the cloud won’t be an essential part of the RIA’s operational strategy. Cloud solutions might be off-the rack, but they fit like a glove.