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November 13, 2020 at 02:57 PM
Vanguard is poised to be at the forefront of the financial services business once again — this time “disrupting” the retirement industry, writes Amber Czonstka, a principal in the firm’s institutional sales, in a recent blog.
The retirement industry, she notes, has many of the “same puzzle pieces” as the financial services business, specifically being “tethered” to legacy mainframe systems, which makes it difficult for plan administrators to “fully capitalize on real-time enhancements in the same way that fintech companies can.”
Czonstka equates trying to make changes to that system like trying to create “a new state-of-the-art app on a flip phone.”
However, other industries that have been disrupted have found out it usually takes an outsider to change it, and in this regard, she says Vanguard “is blazing a unique trail.”
The fund behemoth has partnered with “digital disrupter” Infosys, Czonstka points out, and aims to pair its “prowess in plan design, participant behavior, and participant advice with Infosys’ track record of using technology to create leading-edge, customer-centric experiences.”
See: Vanguard Abandoning Ship Developing New Brand Image
What does this mean? Right now, advisors and their clients might not see it, but changes are coming, according to Czonstka, and here’s how:
1. Future-Proof Foundation
This largely means by going “cloud-native” and building a new platform from the ground up that will allow advances to be added without having to adapt the entire system (think: decoupling from legacy systems).
