by Christian Schneeberger
Our collegiate culture means that experience earned in one part of the world – and relevant to another – is shared. This ensures an efficient and effective service for all our clients, from implementation to helping refine IT systems for new regulations, writes Christian Schneeberger
As in so many other jurisdictions, every passing month brings more scrutiny to the wealth–management sector in Australia. And the steady flow of new regulations means that wealth managers need to adapt quickly to remain compliant.
Most recently we had the long–awaited report from the Royal Commission looking into banking and insurance. Published in February this year, it recommended, for example, that institutions separate out financial advice from sales to avoid any possible conflicts of interest.
This immediately shone a light on the operating and business models of the big four banks in Australia, with Westpac swiftly announcing the sale of its advice business. Others may well follow suit; there are plenty of large, independent financial advisers and wealth managers able and willing to pick up new business. We may also see further buyouts along the lines of that by Crestone’s management from UBS in 2016.
The upshot will be that these expanded or new businesses will need to be able to show regulators that they comply not just with the recommendations of the Royal Commission, but with all current regulation. And in order to remain competitive they will need IT systems and processes capable of adapting quickly and efficiently to any further changes to come along.
This kind of flexibility demands a reliable database with high-quality data. In Australia, some leading wealth managers installed the Avaloq Banking Suite for these features and organised their processes accordingly. Today, both businesses can perform analyses to order on what they’re selling to their customers and produce the appropriate reports. They’re able to do this not just as a result of having the right technology, but because the data is organised effectively. Their reporting can then be adapted in line with regulatory requirements.
An essential part of implementation is putting in place the necessary processes to collect the right data and store it in the correct place, with the relevant levels of access. Knowing which processes are needed to meet existing and possible future regulation takes experience. For Orbium, this is our daily bread and butter.
For the changes demanded by the Royal Commission – separating the business of selling financial products from that of advising on them – our Australia-based team can also draw on work we’ve done in Europe, where advice and sales have been separate for well over a decade.
Looking further ahead, we anticipate being able to assist our Australian clients should something like MiFID II be introduced. In Europe, we have been helping wealth managers and financial advisers prepare for this follow-up regulation that sets out certain requirements for wealth managers wanting to call themselves independent. It bans the taking of commission on many financial products and requires advisers to charge for advice. Although Australia might not yet have such specific regulations, it seems likely that something similar might be adopted soon.
It’s the same with the second EU Payment Services Directive (PSD2), designed to protect customer data. It comes into force in Europe in September and we have been helping institutions prepare for it. With data protection a hot topic among regulators globally, we expect Australia to adopt similar guidelines. Being able to transfer experience makes for smoother, more effective projects.
But our flow of knowledge isn’t all one way. Without a doubt, Australia is leading the field when it comes to blockchain. As part of Accenture, already a major player in blockchain consulting, we at Orbium expect to be able to share some of that knowledge with our European customers soon, as and when it becomes relevant.
Change can be unsettling – even daunting – for businesses big and small. But with the right advice that comes from first-hand experience, it needn’t be problematic. Orbium’s global footprint, together with its collegiate culture, where knowledge sharing is encouraged from top to bottom, means we have the depth and breadth of experience to make implementations and system changes as smooth and effective as possible. Australia might be thousands of miles away from our other offices but our knowledge knows no borders.