GBST is one of a number of firms that have emerged from Down Under to provide technology that powers market-leading platforms in the UK.
The UK financial services market which has historically been slow to embrace technological innovation is a growth area for the Australian firm, according to David Simpson, head of EMEA for GBST.
Analysis of the technology company’s latest financial report (to 30 June 2016) illustrates the value of the UK market to its wealth management business.
Despite a year-on-year fall of 12 per cent in UK revenue – which the company attributed to project deferrals, adverse foreign exchange movements and delays from industry consolidation – it accounts for around two thirds ($43.9m, £27m) of GBST wealth management business ($61.7m, £37.9m).
GBST has come a long way since its launch in 1983 under the guise of Star Systems.
The firm listed on the Australian Securities Exchange in 2005 and further broadened its capabilities through the acquisitions of four companies that were active in the financial services technology and digital design consultancy spaces.
Most notably, in 2007, GBST acquired InfoComp which was the leading provider of funds administration and registry software to the Australian wealth management industry, according to Mr Simpson.
The amalgamation saw the addition of a number of products to GBST’s repertoire – including Composer, which ultimately became the underlying technology of platforms offered by Alliance Trust Savings, Aegon and Novia Global, among others.
GBST ushers in its landmark 10th anniversary since the launch of Composer to the UK market by holding the reins to one of the most significant projects in the platform industry to date: the integration of the Cofunds platform onto Aegon’s Arc platform.
This followed the latter’s £140m acquisition of the former L&G owned platform.
Mr Simpson said: “Aegon organised itself prior to the Cofunds acquisition. They made the necessary change quickly and efficiently.
He added: “Once you are organised for success, then comes the scale game. Scale drives value, volume and profit. Aegon is not the only one that is benefitting from the opportunity to consolidate. I think there will be a lot more consolidation of platforms to come.”
GBST estimates the venture along with other new client wins – including Retirement Advantage – has increased its market share to more than 40 per cent of the UK platform market.
Mr Simpson also points to the struggle for platforms to achieve decent margins because of the cost of re-registering assets, for example, as a key factor behind consolidation.
As technology providers of other platforms, confidentially is paramount, according to Mr Simpson, adding: “We have to be careful with this. There is no mixing of client data or client requirements. Everything is kept separate. We have user groups where – because we take on the burden of regulatory change – we talk about things like the Lifetime Isa.
“The idea is everyone will sit down and help define the requirements and we would then go away and implement it. Generally, there should be a lot of commonality with some of this capability.