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What wealth management can learn from Amazon

What wealth management can learn from Amazon

Like many modern businesses these days, the wealth management industry is a sector that is powered by software technology. 

Software has become such an integral part of financial services that getting these foundations right has never been more important.   

While we frequently do not have direct visibility of either the technology or the processes of the software on which the business runs, there are two important metrics that should be taken into account. 

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Firstly, how long does it take to make changes to that software?

And secondly, how long is it before those changes are deployed into a production environment where they can actually be used?

Currently the wealth platform industry is dominated by a few major platform software providers that provide products with huge feature sets.

Due to the size, complexity, age, and technology of these systems, new versions of large platform software are typically released twice a year. If you are lucky, you might get monthly releases. 

I've been lucky enough to specialise in a job I love - building high quality software, for three decades. In that time I've worked across a variety of industries outside wealth management, and not all industries work the way wealth management currently works.

Shorter software development and deployment times mean faster innovation for your business. That amounts to a competitive advantage.

The likes of Amazon, Netflix, and Facebook understand this, and have put in place technology and techniques that allow them to confidently deploy robust, well-tested new versions of their software many times per day.

Let that sink in - technology that evolves continuously can provide you with tremendous advantages.

Amazon, Netflix and Facebook are are not alone. 

The 2017 State of DevOps report is compiled from tens of thousands of responses from various IT providers in many industries.

They found low information technology performers deploy new versions of their software between once per week and once per month, while high information technology performers deploy software multiple times per day.

You can't get there from here

So, if more frequent software releases are helpful, why don't the big players in the wealth management industry just release new versions of their software more often?

They find themselves under increasing pressure to do so.

The problem is, legacy software built on older technology tends to be monolithic in design. 

That was state-of-the-art 10 years ago, but technology moves fast. Think what mobile phones looked like more than 10 years ago.

You wouldn't want to own a phone that old, so why would you run your business on technology that old?

Wealth management software typically comes delivered as a single product, with a huge set of features, interfaces, and interactions. Manually testing all that complexity takes time.