Why collaboration is key to raising standards across financial services

Transfers are a good example of this. No single platform can fix transfer delays on its own. Better outcomes require coordination between ceding providers, receiving providers, registrars, technology firms, advisers and industry bodies.

Encouragingly, the market is starting to organise itself around exactly this kind of coordination. Initiatives such as STAR have brought firms together around common performance standards. The Platforms Association’s recently announced Transfers Charter continues this work, having gathered signatures from all the major platform providers – including Aberdeen Adviser.

We are investing heavily in raising industry standards and improving how firms work together. Recently, Aberdeen partnered with Woven on pension transfer automation and Criterion with ZeroKey to set out how the information needed to open platform accounts should be structured and exchanged to create a smoother digital onboarding experience for clients.

There is still plenty of room for improvement, but the direction of travel proves the point that when firms commit to shared standards and shared data, the whole market speeds up.

Clients don’t care whose fault a delay is; they simply want their money and assets to move efficiently. Collaboration is therefore essential to delivering a good client experience.

Collaboration across industries

The cross-industry cooperation that made Open Banking possible has led to the birth of an entirely new ecosystem of services and opportunities.  There are several other examples across financial services.

The Pension Dashboard, though a long time in the making, when finally live will require firms across the market to connect to common infrastructure and standards. This should surely be the springboard for a raft of better outcomes.

We have also seen joint efforts to address fraud prevention. Providers, regulators and technology firms increasingly share intelligence because they have recognised that preventing scams is bigger than any one organisation.

There are other, arguably even more powerful examples of collaboration if we look outside of the financial services sector. Most people think of Apple and Microsoft as fierce competitors but forget that in 1997, Apple secured significant investment from Microsoft to keep itself afloat.

Part of that investment saw the two companies sign a product and technology development agreement. As a result, Apple’s hardware is more valuable today because Microsoft Office, Outlook, Teams and OneDrive work seamlessly on Apple devices.

Equally, Microsoft benefits from being available to millions of Apple users. So, while they compete fiercely in some areas, there is a long history of collaboration in others that has delivered much better outcome for customers.

Financial services should take a similar approach. Healthy competition is important, but there are areas where collaboration raises standards for everyone and ultimately benefits the two parties that matter most – advisers and their clients.

Creating better outcomes

Technology integrations can pay real dividends here. Advisers lose valuable hours every week rekeying data between platforms, back-office systems, cashflow modelling software and risk-profiling tools. Deeper, more open integrations that enable two-way data flows remove that friction, cut out errors and hand advisers back time to spend with their clients.

No single provider can build that connected ecosystem alone. At Aberdeen, we are working on a number of these integrations with partners such as Intelliflo, Woven and ZeroKey, because we recognise that the value of a platform is measured not only by what it does on its own, but by how well it connects with everything around it.

Due diligence is a further opportunity for a more joined-up approach. As the regulatory bar rises, advisers are being asked to evidence more, more often, across every provider they use. Yet much of that information is requested and supplied in slightly different formats by every firm, duplicating effort on all sides.

Standardised data templates and common disclosure formats, agreed across the industry, would help save advisers significant time without diluting the rigour of their research. No firm gains a genuine competitive edge from making due diligence harder than it needs to be.

The winners in our industry won’t be the firms that build the highest walls, but rather those that build the strongest bridges. Transfers, fraud prevention, Open Banking and industry standards all demonstrate the same lesson, that collaboration is not the opposite of competition; it is often the foundation that makes effective competition possible.

This article originally appeared in Money Marketing.