10 Top Tech Trends for BDs: FSI OneVoice 2012

Leading advisor partner technologists offer a look at what's hot now and what's on the horizon

At the annual Financial Services Institute’s OneVoice conference in Orlando, Fla., on Tuesday, Spenser Segal, CEO of ActiFi, moderated a discussion meant to inform the attending independent broker-dealer executives about the 10 top technology trends that are affecting IBDs already and those that are likely to do so in the near future.

Segal (left), a regular contributor to AdvisorOne, and panelists Suresh Kumar of Pershing and Ron DePoalo of Fidelity came up with the list prior to the presentation, and took questions from attendees on the impact of those trends on IBDs’ businesses. While the list is not meant to be a ranking, it did begin with changes that have already occurred–and are still occurring–while the final couple of trends on the list are more forward looking.

Here are the top 10 trends:

1) Increasing Technology Capability.
This trend includes tech advances that have led to much cheaper storage, much faster processing power and much faster connectivity. Kumar, chief information officer for financial markets and treasury services at BNY Mellon and Pershing, the largest clearing firm for independent BDs, said the most obvious example of these trends is Amazon’s server capacity, which allows companies much cheaper access to storage

2) Mobility.
Ron DePaolaDePoalo (right), chief information officer for Fidelity’s clearing firm for BDs, National Financial, and its custodian for RIAs, Fidelity Institutional Wealth Services, acknowledged that smartphones and tablet technology have already made great inroads, and posed some serious compliance problems for the independent BD space. But DePoalo, who before joining Fidelity in 2008 was chief technology officer for Merrill Lynch Global Wealth Management, said “we’re only in the first or second inning of a nine inning game” for mobile technology.

Suresh KumarKumar (left) noted that the Pershing platform of which he is chief architect, NetX360, is available for all mobile devices, but noted that adoption rates for the platform is higher among iPhone and iPad users, while “BlackBerries seem to be on the way out.” Responding to an attendee’s voiced concerns over data security on mobile devices, Kumar suggested it’s always a good idea to have a “third-party firm test your security,” while DePoalo recommended that the execs  “keep any resident applications very thin” on mobile devices, and suggested they consider using Good Security, an application to enhance mobile security.

3) The Integrated Workstation.
Kumar noted that “investing in an integrated platform is easy, but getting people to adopt the platform “is hard.” 

4) Integration.
Kumar noted that integration “is an easy-to-understand concept, but very difficult to do,” and all three panelists agreed that everyone seems to have a different definition of integration.

5) Workflow.
DePoalo (left) noted that workflow systems can yield “great efficiency, but it's no good to automate a workflow that needs to be changed.”

6) Cloud-Based Computing.
This is one of the top 10 trends that many BDs are already using in one way or another, often having been led to the cloud by their previous use of software as a service (SAS).

7) Outsourcing.
While advisors and their partners are comfortable outsourcing key deliverables like portfolio construction, Kumar and DePoalo argued that, as in trend number one, it can be more efficient, and cheaper, to outsource data storage, for example, than to try and build your own server farms.

8) Social Media.
This is a trend that has wide-ranging compliance and liability ramifications for BDs, but the panelists argued that to stay competitive and to retain clients who themselves are social media users, BDs must find ways to incorporate social media. Among the applications that can make that happen in a safe way are Socialware, said DePoalo, and SalesForce’s Chatter.

9) Crowd Sourcing.
Kumar described crowd sourcing as “leveraging the masses to get work done,” with a leading example being Wikipedia, but also such sites as TripAdvisor and even Amazon. “I’ve never been disappointed” in following the recommendations of other travelers on TripAdvisor, Kumar said, but also suggested companies could outsource creative work such as designing websites. “The concept that you need an employee from nine to five is going away,” Kumar argued.

10) Big Data.
The final trend that is on the horizon is a natural outgrowth of cheap memory and easy accessibility: that there will come a time when there is just too much data for a company to process.

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