Now that the back end of the record keeping business is fully commoditized, a significant portion of the competition for business is now based on fees for services. This is never a good sign — just ask your friends in the airline industry. As a result, record keepers need to start articulating their value to better differentiate themselves — a need that Sungard’s Greg Clark highlights as the Number 1 issue facing the industry today.
Speaking at the 2013 SPARK National Conference in Washington, DC yesterday, Clark also recommended looking at the infrastructure record keepers have created over the years, with an eye on reducing the costs of older services. As examples, Clark cited customization and online error correction, which he’s seen result in pickups as high as 40%.
“There’s been a lot of investment in platforms,” said Clark. “Now the focus is on, ‘How do you leverage what you have without spending a lot of money?’” One answer, Clark believes, is alternative hosting models — a lower-cost option than in-house IT development. Sungard, like the rest of the industry, Clark believes, “has to do a better job at innovating. Currently, we’re taking a hard look at our legacy systems.”
Jude Metcalfe of DST Retirement Solutions, who joined Clark in a panel Q&A discussion moderated by Bob Wuelfing of the SPARK Institute, agreed about the increasingly critical role of a clearly articulated value proposition. “With competition more severe every year, the Number 1 issue is how to create value for clients,” said Metcalfe, “and how to maximize the overall value of the book of business.”
In today’s business environment, it’s important to go after new business, of course, but it’s becoming equally important “to protect and keep the clients we have,” said Clark — and to derive value from nontraditional sources, like data.
