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The Rise and Rise of Financial Technology Expert Consulting

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By Martin Thompson, Head of Platform at Adaptive Financial Consulting.

Consultants have become integral to how complex modern businesses operate. Whether tapping into specialist legal or management advice, firms need expertise that is not immediately available to them to differentiate and compete. The same is true in financial technology – larger firms will typically have adept in-house development teams servicing their technology stacks to help meet evolving customer demands. However, regardless of how good in-house teams are, there will always be limitations to their expertise – whether in architecture, code, security, fault-tolerance, or performance design – an issue that has fuelled demand for highly specialised expert consultants. Sometimes a combination of architectural qualities are required, such as performance and fault-tolerance, providing a specialised challenge that only a few experts can deliver on.

As we move away from an era when vendors sat at the centre of innovation, deep specialisms have emerged in financial technology – leaving behind a time when a development team could be a jack-of-all-trades. As firms increasingly opt to own their technology – building and managing it themselves – they can no longer lean on third party vendors to guide their innovation. Instead, internal development teams now have near full control of the innovation to gain an edge on competitors in a market where firms are increasingly competing through technology.

At an operational level, this change has raised the profile of development teams within their businesses by giving them greater influence over their firms’ technological trajectory. With greater responsibility, teams so crucial to a firm’s future success sometimes need an outside perspective to break out of their silos and help them to ask “how can we do things better?”. In the same way elite athletes employ coaches to identify areas for improvement and to enhance performance, sophisticated firms should question how they can take their technology to the next level. This change in approach has led to the rise in expert consultancy, with in-house teams using consultants’ expertise and supplementary staffing to either help them build their technology stack or give them the expertise and tools to do it themselves.

Different from legal advice, where laws and practice will evolve slowly but visibly, technology is quietly changing before our eyes. There is no one formula that will solve a technological problem – while market pressures are universal, each client and their objectives are different. A common issue faced by vendors trying to tackle these complex problems is that they will often build a solution around an existing tool or capability. The key for expert consultants is therefore to properly identify the root of a problem and work back – developing a bespoke solution to address a specific need, rather than trying to fix a problem based on a tool developed to address a generic issue.

We are now at a point where all financial services firms are technology firms, as tech becomes more integral to their offering. Institutions, investment managers, and platforms are therefore locked in a technological arms race where it is no longer enough to rely on off-the-shelf solutions. As a result, firms are taking a much longer-term view with regard to their technology stacks, setting solid foundations on which they can build their businesses. Mindsets have shifted from focussing on buying new technologies that can be bolted on to fix short term problems (as you would at an IT store), to seeing a technology stack as an evolving, living thing.

This longer-term view in technology has resulted in an expert consultancy model similar to enlisting legal counsel – having expert consultants on-hand to deliver highly specialised advice and supplementary staffing, either continuing to build proprietary systems, or ensuring in-house teams have the tools they need to build cutting edge systems themselves.

In recent years, the technological map has opened up – far from the previously linear approach to solving problems resulting in solutions looking broadly similar across the market, we are now seeing an incredible diversity of technological solutions. In our industry, knowledge is power – being able to collaborate and tap into broader expertise when needed has proven to be invaluable and has paved the way for the unstoppable rise of expert consultants. Looking to the future, the greater the pool of expertise and resource firms can access, the greater their chances of success.

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