A new benchmarking report highlighting huge optimism for growth across the industry with platforms looking to accelerate automation across their businesses and a strategic focus on AI.
The inaugural Platforms Association Horizons Report is a comprehensive guide to the industry’s operational landscape, technological capabilities, and strategic priorities. The report provides unprecedented insight into the platforms sector taking views from firms representing around 71% of UK attributed assets under administration (AUA) with £928bn in AUA, representing approximately 10.1 million UK customer accounts and 14.2 million accounts globally.
The key headlines from the report show:
- There is a surge in tech spending with a focus on automation, data analytics and AI with tech investment double the rate than that of operations. Leading companies spend 32% of their IT budget on personnel compared to 61% on change, highlighting their agility. Companies in the ‘zone of improvement’ are more heavily reliant on legacy systems and spending more on operations.
- Growth is at the forefront of firms’ minds, yet market dynamics and competition mean that for companies with slower onboarding times for new customers (defined as six days or more), there is a risk to these businesses in cost and customer trust if they scale without addressing these issues. The research highlights that operational costs grew by 3% between 2023 and 2024, yet growth is expected to halve this year.
- Automation is the biggest strategic priority for most companies followed by data & analytics and cyber security. Interestingly, while AI is the hot topic of the moment, it is underleveraged in the industry. However, almost nine-in-ten firms state AI as the number one priority over the next one to three years.
- The FCA’s Consumer Duty is the number one regulatory priority for the sector. Unlike other regulatory requirements, Consumer Duty represents a fundamental shift in how Platform businesses operate. It cuts across propositions, pricing, servicing, communications and operational models. Overall, the growing regulatory requirements on companies mean most allocate 16-30% of change activities to regulations, underscoring the significant impact of the changing regulatory landscape on platforms.