With time, comes change. We only need to look at the last decade to see how things have evolved, whether that be socially, politically and technically. If we remember correctly, it was just over 11 years or so ago that a blackberry was only considered a delightful summer fruit and Facebook was but an idea floating around in Zuckerburg’s mind whilst he trailed the halls of Harvard. The world is changing, and it is changing fast.
Technology continues to be the most disruptive innovation of our time, and one could argue that the most prominent industry technology has re-landscaped is the financial sector. Especially since the demise of Lehman, the needs of financial organisations have changed drastically. Those older, almost prehistoric, technology companies not adapting and evolving their technology solution to fit the changing needs of their clients, and the industry, will soon fall short of the hurdle whilst newer, smarter and innovative solutions come along to take their place.
“Change is the law of life. And those who look only to the past or present are certain to miss the future.” – John F. Kennedy
This quote can ring true for legacy systems that seem to have overlooked all the warning signs of the industry needing a more infallible solution to solve current problems; an increased workload with limited supply of resources, whilst tackling the throes of never ending regulatory demands on a decreasing budget.
An ever changing landscape breeds differentiating needs for financial organisations, as regulatory enforcement continues to create challenges and pressure on the day-to-day workflow of asset managers, as well as heighten awareness to stay compliant with regulators; avoiding the fines, penalties and the huge reputational damage non-compliance incurs.
The entrance of new technology solutions, such as cloud computing, are able to adapt to fit the needs of their customers, and help firms tackle the aforementioned challenges they face. This ability to adapt presents financial firms with the capability to become agile and responsive to shifting challenges and pressures.
Large legacy vendors, who are not only unwilling but also unable to change, lack the ability to react to market stress and have huge lead times in terms of implementing an infrastructural change. If regulation restrictions continue to evolve at the speed in which we are accustomed, then these systems simply do not allow for the buy side to adapt to changes as fast as necessary.
We know that, when it comes to technology and the economy, if you’re not constantly moving forward then – without a doubt –you are moving backwards. – Bill Owens
Above all, innovative cloud solutions offer a variety of functionalities and benefits that are of interest to the financial world – namely allowing firms to manage time efficiently, stay regulatory compliant and keep costs to a minimum – something incumbent tech solutions cannot do.
Simply, this is not an issue that legacy vendors can solve by throwing money at or adding a few more sales executives to the payroll. Newer solutions have looked to the future and adapted their business models to fit the current needs of the client and are therefore thriving.
As John F. Kennedy said, “Change is the law of life”. Without change there is no innovation, no creativity and no incentive to develop. In times of financial market stress, this is vital for companies wanting to not only improve the lives of their clients, but also build their business, brand and products. It is these innovative, digital-era entrants, both big and small, that threaten to make “analog-era” incumbents history.