Novia is banking on a microservices strategy to ensure it does not have to employ more administrators in order to scale.
Barry Neilson, Novia’s chief commercial officer, said the platform intends to “sweat the technology” and not its workforce as it grows in assets and client numbers.
Following an overhaul of its management team, Novia is now focused on building layers of microservices on top of its core bookkeeping technology, powered by GBST.
The platform has already added a Capital Gains Tax calculator, but over the next year Novia envisions housing an “ecosystem” of microservices, according to Neilson.
“The industry is littered with instances where platforms have done large releases that haven’t gone particularly well,” said Novia’s commercial boss.
“They've caused bugs and defects and impacted on their users. Whereas if you're built within a structure which is mostly microservices, rather than one big code base where if you change something in one part it may have a negative impact on the other part, you can just deal with small boxes of code.
“That doesn’t have the same risk of contagion and reverse testing requirements that you would have normally.”
Finocomp, a Bravura-owned wealth management technology provider, is one of Novia’s microservices partners. The platform is keen to partner with other software firms, as well as build its own microservice layers.
With £12bn of assets, Novia is on the smaller side of the advised platform market. While many of the bigger players push the mantra ‘scale is everything in this market’, Neilson is quick to challenge this.
Asked whether scale was a concern, Neilson said: “I'm definitely not phased”. He joined Novia from Nucleus, a platform with around £70bn of assets.
“The reason for that is I think there's a big difference between scale and scalability. If you go back 10 years, the biggest platform by a long way was CoFunds. They had £70bn, still struggled to make a profit, didn't succeed as a business and ended up being sold to Aegon,” said Neilson.
“They had scale, but they didn't have scalability because their technology could not deal with the level of business that they were bringing in.
“I think that's a big challenge now. I mean some platforms will talk all day about the importance of scale. I don't think that's right. It's all about scalability. You have technology that means that you can scale your assets and your revenue line without scaling your cost base.”
Back in December, rival adviser platform Transact’s parent company IntegraFin Holdings published its annual financial results. It said administrative expenses had increased by £7.7mn, or 15 per cent, to £58.9mn in 2021 from £51.0mn in 2020. The increase, the platform owner said, was mainly due to an increase in staff costs.