[Digital transformation discussions usually focus on the ROI of saving time, money and effort, but the true strategic benefits are not just about these savings. Going beyond operational efficiencies, digital transformation positions and enables a firm with the ability to not just survive but thrive as a business in today’s digital-centric world. A forward-looking mindset and strategy needs to be applied to this operational endeavor to capture its full competitive rewards. While it is not too late to catch up in digitizing your business, firms need to position themselves at the right place along this digital path and be aware that “digital transformation” efforts are shifting to the “digital optimization” stage.

The key steps here are to build the ability to use all your data to function as intelligent systems and to design products and services as essentially “intelligent” offerings. We have to learn how to think about these issues because they go far beyond a purely operational perspective.

Another important point to consider was brought up in a recent WealthManagement.com article “Time for the Most-in- One Tech Solution to Rule the Back Office” where it was proposed that the search for a comprehensive technology platform solution may not be the best strategy to get the outcome you are looking for. In other words, the recommendation is to do not try to get someone to do it all for you.

To explore this further, we reached out to Institute member Ryan George, chief marketing officer of Docupace – a financial technology company that has created a cloud-based, digital operations platform with data-driven client onboarding, unified workflow and document management automation capabilities. Our goal in this interview is to better understand how implementing a digital transformation for your firm can enable strategic advantage and competitive positioning. Ryan has some interesting thoughts and experiences to share on this topic.]

Bill Hortz: Can you explain your perspective on the different paths or options financial firms have toward their digital transformation efforts?

Ryan George: That’s perhaps the greatest challenge for firms – the sheer number of paths and options. Let’s try and create some categorical differences.

First, let’s differentiate the front office from the back office. Front office are the client-facing tools, like client portals, client/advisor onboarding solutions, financial plan creation tools, etc. Back office, which is Docupace’s bread and butter, typically covers data aggregation, compliance, account opening/maintenance, document management and storage, audit, and reporting.

On both sides, firms have looked to custodians and platform TAMPs to provide “all-in-one” capabilities within a single technology solution. While this covers much of baseline business practices, it sacrifices optimization, user experience, and other strategic benefits for convenience.

Hortz: What are some of the growing gaps advisors are reacting to in the all-in-one legacy platforms at the wirehouses, custodians, and independent broker-dealers?

George: For years, the “all-in-one” approach worked well enough for financial advisors and clients, but times have changed. The industry has evolved and independence is the flag most advisory firms wrap around themselves these days. In addition, gaps in these offerings have widened as client and advisor demands have shifted.

That last point is a predominant reason why there is a revolution afoot in the back office. Wealth management firms looking to achieve scalable back office operations are looking beyond traditional choices of either an all-in-one technology solution or an array of individual plug-and-play products. Many are opting for a Goldilocks solution, or middle-ground approach, that focuses on technology providers who deliver a “most-in-one” platform as a better solution and know where to find and integrate other key technologies as needed.

Hortz: How can firms start moving from digital transformation to the digital optimization stage?

George: Believe it or not, digital transformation was yesterday. Today, wealth management firms should be optimizing the digital experience they deliver, not building it from scratch. However, it’s a broad industry with many different types of advice providers so I understand digital optimization is aspirational for many.

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