24 June 2009

For any financial firm, the key challenge today is how to save money while attracting and retaining customers. Jacqui Griffiths found out how Microsoft is creating efficiencies to give every firm the technology it needs at the right price.

Over the past year, global market turmoil has led to a remarkable series of events for financial firms of all kinds. The fallout from this will impact individuals, communities and organisations, whether high net worth investors, low net worth bank customers, or the providers of the many products and services that these people use.

In this situation, sensitivity is a must. While in a broad sense everybody is under pressure, recovery will depend on the ability to pay attention to detail. In order to recover from the economic turmoil they face, financial organisations need to restore the confidence of customers, and to achieve this, they must be sensitive to each customer’s needs, whether that customer is an individual or an institution – only then can they can drive sales by providing the financial products most relevant to each customer, at the right time.

Now, more than ever, investors are demanding expertise from their financial advisors in helping them to navigate this turbulence

Brad Prodger, Microsoft Perhaps most pressing for customers and providers alike is the need to save money. Indeed, for financial services firms right now, every cent of expenditure must be justified while sales and customer service need to improve. Unfortunately for many, particularly when it comes to IT, economy has often meant compromises that can be detrimental to customer service, or lead to costly fines from regulators because corners were cut. Clearly, this type of false economy must be avoided – but can financial organisations achieve economy without compromise?

“While it is anticipated that technology spending will slow through this market downturn, the fundamental truth is that superior customer service, timely advice and actionable results are actually needed more during these turbulent times,” says Brad Prodger, director, worldwide Advisory Services at Microsoft. “Now, more than ever, investors are demanding expertise from their financial advisors in helping them to navigate this turbulence. By achieving a holistic view of clients’ portfolios and interactions, financial advisors can achieve a competitive advantage.”

Microsoft’s experience in providing technology for companies across the financial industry now comes to the fore. “While different areas of financial services – such as buy-side, sell-side and insurance – face different challenges, the current economic system has also thrown into relief the similarities between many of those challenges,” observes Prodger. “For example, whatever your line of business, siloed information will drain productivity – so every financial advisor, whether an insurance agent or an institutional investment consultant, can benefit from the 360-degree customer view that technologies like Microsoft Dynamics CRM, SharePoint Server and Customer Care Framework (CCF) can deliver. Once you look at it from this perspective, you see that there are some core similarities between potential solutions.”

Platform for success
In order to address these needs, Microsoft developed Advisor Platform, its wealth management solution for financial advisors in banking, insurance and capital markets industries, over three years ago in the US. The solution’s integrated framework is aimed at increasing the productivity of financial advisors through 360-degree portals, which provide comprehensive visualisation of client data with workflow capabilities, enabling advisors to differentiate themselves through superior customer service. The success of Advisor Platform has seen its continued expansion – now established in Western Europe and the UK, it is also building momentum in emerging markets in Japan, Singapore, Hong Kong, Korea and Australia.

Building on the strength of the Advisor Platform approach, Microsoft went on to address the customer-facing issues of insurance agents and buy-side and sell-side financial firms by developing Agent Broker Services and Institutional Client Platform. The former was developed globally a year ago, while the latter, during the same timeframe, has so far focused more on the UK market. Both of these solutions are gaining momentum, with early adoption in the UK and US, and a developing partner community that is key to this success.

Now, in recognition of the technological similarities at the core of these solutions, Microsoft has combined them under the umbrella of Microsoft Advisory Services, to enable financial firms to achieve an economical technology while maximising advisor productivity.

This is not to suggest that there is a technology cure-all solution to the problems faced by different financial firms. But by working with the similarities between the technologies used, it is possible to create low-cost, high-value advisor solutions to help each of these organisations manage risk, assist with integration efforts and deliver a superior customer experience.

“One of the most powerful aspects of the Microsoft stack is that it is designed to easily snap in important tools that then can be consumed by advisors, call centre representatives, business and compliance executives and clients, as well as administrators and developers,” says Prodger. “For example, Visual Studio encompasses all technologies and is ideal to help reduce cost when additional functionality is required.”

“At Microsoft we understand the impact the economic downturn has had on all our customers, and we know that financial services firms are feeling the effects perhaps more than any,” says Brad Prodger, director, worldwide Advisory Services, Microsoft. “We know that every cent of expenditure must be spent wisely and with as positive an impact as possible. To this end we have brought together these products under the umbrella of Advisory Services, in a way that clearly articulates how Microsoft technologies can be leveraged to reduce costs, maximise the value of investments already made, and increase client satisfaction and revenue – in short, to save our customers money.

“By deploying workflow-enabled 360-degree portals, financial advisors will be much better equipped to manage multiple tasks, such as planning and moving assets to safer instruments, improving the depth and breadth of services, and creating opportunity for their wealth management organisations,” continues Prodger. “This delivers on the biggest question that our customers are faced with – how to do more with less. It creates economies while delivering a platform for scalability that is future-proof.”
The key ingredient

The aim of any IT solution is that the value it delivers to the customer is greater than the sum of its technological parts. In the case of Advisory Services three key ingredients are involved in achieving this – economy, performance and partners. The first two elements, where enterprise-level technologies are used, and indeed reused, in the most cost-efficient and productive way, seem simple. But the key ingredient binding these together is the Microsoft partner ecosystem.

Microsoft is going to market with Advisory Services under a hybrid partner model that plays to the strengths of its partner companies. “Our partners have a huge part to play in Advisory Services,” says Prodger. “Advisor Platform has a large and well-established partner ecosystem, and we recognise that in each region, the partners are the ones that have the relationships, the local knowledge and the specialist expertise that gives them the edge in providing the right solutions for each customer.”

For example, he says, in the Asia Pacific region there is significant market potential for Advisory Services, and Microsoft’s partners in the region are the key to unlocking it. “We’re working with partners like Accenture, Avanade and HCL to build sales plans, which focus on specific solution areas, right down to the region those solutions will be used in.”

Microsoft has some 76,000 partners in financial services, organised into a tiered structure. In the growing Advisory Services market, the Managed Partners – which often work within a specific region – are key to the company’s growth. “We work closely with these partners,” says Prodger. “We interface with them on what to sell in their geography. These partners have a clear focus on both their territory and their technology and industry specialisation. They are crucial to extending the Advisory Services offering to a wide audience in a way that will create significant value for each customer.”

This evolution of a specialist, regionalised partner network alongside the Advisory Services offering, speaks of a smarter approach to addressing the needs of customer-facing financial services staff. “Services such as Institutional Client Platform and Agent Broker Services are growing fast in terms of adoption,” says Prodger. “There is a huge and growing market for Institutional Client Platform, for example, because many jobs in private sector financing and capital markets are being automated. By combining core technologies, reusing IT investments and adding the in-depth knowledge of a local partner, we can give financial advisors more time to spend with their customers, and the opportunity to lower margins, gain visibility, and to do more with their capital.”

Simple but effective
The Microsoft Advisory Services approach takes the core technologies used by Advisor Platform, Institutional Client Platform and Agent Broker Services, and enables financial firms to create solutions that help resolve the issues that are key to their business.

The offering is organised in three key building blocks. The first block enables financial firms to expose the data locked away in disparate systems using powerful technologies such as Microsoft SQL Server and CCF, which integrate into disparate systems. Next, the organisation can compose, or make sense of the data using SQL or CCF, regardless of what code or application it comes from, or how it is used. “The data is exposed at workflow level in the way the advisor works,” says Prodger. “These technologies deploy much faster than many others – in under three months versus more than a year for some of our competitors – because of the .NET/Web services oriented architecture.”

The final stage is the consumption of the data, which is presented in a meaningful and usable way to those who need it. This is where advisors, call centre representatives, business management, compliance officers and even clients tap into all the services that have been exposed and composed by the first two building blocks. It means that one application platform can serve multiple lines of business (LOB), consolidating work that has historically been performed within each LOB silo and allowing for greater client transparency across LOBs to promote cross selling.

For Prodger, the benefits here cannot be underestimated. “For many clients, the single most important value proposition is that by exposing enterprise data, and leveraging entitlements and security features, they also unlock the information to business users on software that they’re already accustomed to,” he concludes. “This means the enterprise can save money by leveraging client tier technologies that are already in place and minimise training costs.”

This article first appeared in the Summer 2009 issue of Finance on Windows.

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