Perpetual takes customer data to the cloud

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Perpetual takes customer data to the cloud

Helping to smooth over cloud security risks with finance industry regulators.

 

In the financial services industry - an industry concerned with risk - taking your customer data to the cloud is sure to raise a few eyebrows.

But for wealth management firm Perpetual Private Wealth, currently in the throes of implementing a cloud-based CRM system based on Salesforce.com, the rewards outweigh the risks - even if the strategy did cause some alarm among at the folks at finance industry regulator APRA (the Australian Prudential Regulatory Authority).

ASX-listed Perpetual, the sixth largest wealth management company in Australia behind the big four banks and UBS, is rolling out Salesforce.com as part of a broader review of IT architecture at the wealth management firm.

Perpetual general manager of strategic initiatives Nathan Jacobsen said the Private Wealth division of Perpetual had suffered from a lack of investment in IT in the past, and has kicked off a three phase project to boost productivity and efficiency.

In the past, Perpetual Private Wealth had survived on a number of small desktop CRM solutions that hooked into Lotus Notes and Microsoft Access databases.

"Our advisors were getting by with what they had," said Jacobsen. "The CRM systems were not integrated with each other or our portfolio management system. They were very difficult to maintain and support."

Phase One of Perpetual's technology overhaul involved some quick win projects. It focused on the introduction of minor features that are highly visible to customers, such as the introduction of BPAY, for example. 

Phase Two, still underway, is the development of 'My Client' - a cloud-based system based on Salesforce.com that combines an enterprise-wide CRM system with a WebMethods business process workflow tool and a TRIM document management system.

My Client, which is expected to be fully integrated and operational by the end of 2010, will provide Perpetual's advisors and trust managers "a single view of the customer", Jacobsen said.

It will also take much of the processing load off the firm's portfolio management tool, PACT Proactive - an ageing system for which Perpetual purchased the source code some 15 years ago. The final phase in Perpetual's business case, which is some 12 months away, will be the replacement of the PACT system.

Managing risk

Jacobsen said the company only embarked on a SaaS (software as a service) approach after some "very careful conversations" about security in the cloud.

When the IT department took the idea to the board, the concept had to be explained in some detail.

Adopting SaaS was "not a decision we took lightly," Jacobsen said.

"When we positioned this with the board, we told them there were some things we absolutely needed control over, but there are others we don't."

The conversation was driven by the expected benefits from the project, but kept in check by a solid dose of reality around the risks, he said.

"What the cloud gives us is the ability to turn IT services into a commodity," Jacobsen said.  "We provide business services, but we are a relatively small business - 6,500 high net worth customers and 25,000 accounts. The amount of investment we required to maintain legacy systems was substantial and had the potential to slow down what we deliver to clients."

Jacobsen talked of the "promise of the speed to market nirvana" that could be attained in the cloud, versus "signing your life away for ten years" on another in-house system.

To smooth over management concerns, the firm's in-house IT security team presented a paper to the board with an analysis that addressed how the firm could mitigate any security issues from adoption of a cloud platform.

"Their recommendation was written and taken to executive level, and it was decided that this is an acceptable level of risk," he said.

Jacobsen revealed that financial regulator APRA has since raised concern over data sovereignty with the company during a routine review.

"[APRA's interest] illustrates that doing this is unique. Even our regulators are not used to this.

"APRA comes in every three years with a standard set of questions. This is the first time they quite naturally started asking some new questions about how we manage the risk process.

"And we can give a very confident answer."

APRA's investigation was ongoing at the time of publication.

Future plans

Jacobsen said Perpetual's long-term plan is to white label some of its broad range of services on offer through My Client for other wealth management advisors to provide to their customers.

"There are other smaller advisors with high net worth clients out there," Jacobsen explained. "One strategy might be to try and steal their customers. But a better one is to offer those advisors complementary services they can't offer their customers.

"At Perpetual, for example, we offer estate administration services, whereby Perpetual becomes the executor on a will and manages the estate for a fee. It's a valuable service for a high net worth customer, but not easy for an advisor with 120 clients and 8 staff to manage. They run the risk of losing clients to larger organisations that offer a broader range of services.

"We can develop and customise some of these services through the My Client portal to give other advisers the ability to resell those of our services they don't have the resources to offer," he said.


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