Why flexibility is imperative when developing digital financial services

A recent blogpost by WealthTech firm Kidbrooke has examined the key technological factors that ensure the flexibility of digital financial services.

In a world of rapid change, the development of digital technology is becoming not only more and more common but also more and more necessary. With this considered, many companies are understanding the pressing need for technological flexibility in their products due to the unpredictable landscape brought about by the Covid-19 pandemic.

When it comes to technological transformation in the financial services space, Kidbrooke believes there is no ‘one-size-fits-all’ approach when it comes to updating your digital services – depending much more on the company size, available tech stack and human resources amongst other things. The company highlighted that the effects posed by the pandemic ‘only confirm we live in a world of rapid change, and therefore any strategy needs to be reviewed, updated or changed very frequently’

Kidbrooke stated that when a company decides on creating a new digital service or feature, it is important for them not to be swept away chasing short-term gains and instead focus on thinking strategically. It gave the example of following a successful pilot of a technology, it would be better to tailor the functionality to suit customers’ feedback. Strategies like these, Kidbrooke claims, require ‘tremendous flexibility’ of the technology that drive a companies’ digital and hybrid financial journeys.

What are key the key elements of strategic flexibility for a digital product? Kidbrooke suggests some of the key elements are related to core components such as the calculation engine driving its prediction and estimates – and added that a multi-period, simulation-based underlying model can help companies represent their institution’s financial products, fees and strategies as accurately as possible. In the case of OutRank – Kidbrooke’s financial simulation engine – the firm said this is achieved ‘by capturing the probabilistic aspects of the market development, allowing for granular mapping of your institutions’ products as well as the incorporation of house views’.

Kidbrooke continued “Features such as these are paramount for efficient updating of product lines and investment strategies. They also support the easy addition of new tax regimes and account types in the event of expansion to new markets. Finally, the flexibility that comes from a simulation-based, multi-period model allows for the creation of personalised solutions targeted to all sorts of customers, from retail investors to high net worth individuals”

The company also cited in the blogpost that the ability to provide retail wealth management customers with a 360-degree view of their financials was one of the most significant industry trends of 2021.

Despite this clear trend, Kidbrooke remarked that in its experience, many customers tend to start their digitalisation journeys by focusing on one business area and then gradually expanding out as their transformation strategy progresses. In this respect, the WealthTech firm cites flexibility as a ‘real strategic advantage’ when it comes to ensuring the technology driving a company’s digital services can support them throughout the entire roadmap and beyond.

Another key area aspect of strategic flexibility cited by Kidbrooke in the blogpost is connected to the numerical output consistency that drives digital customer journeys, with the business stating that making sure a company’s calculation engine supports the holistic use case consistency while enabling them to pick and choose specific use cases where relevant ‘is a vital step to achieving consistency within your services’.

Kidbrooke concluded, “In our experience, we found it essential to maintain a strategic perspective regarding technology driving your solution. It pays off to devote attention to the models performing the core calculations within your digital services. Moreover, it is a good idea to ensure that even if you choose to start small, your technology will allow you to complete the following steps of your strategic roadmap. Finally, it is crucial to achieve consistency of any financial guidance or advice in your digital financial services, both for improving the customer experience and decreasing time-to-market for your future digital journeys.”

The blogpost can be read in full here.

Copyright © 2021 FinTech Global

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