Trust in the future

There is no denying that the rate at which technology is evolving alters how we perceive everyday matters, and live our professional and personal lives. There are, of course, pockets of life that have been largely immune to the rapid technological change of the past two decades and, arguably, the fiduciary industry has until recently been such a place.

However, things are changing. Work practices are evolving, as is the gathering of information and the mindset of how to conduct fiduciary business. Where there may have historically been relatively few firms that embraced industry-specific technology and flexible work practices, the widespread adoption of these changes has largely been prompted by the COVID-19 pandemic. Many firms needed to adapt to survive, making their survival almost Darwinian in nature.

What has changed in the past few years?

The simple answer is quite a lot. The rate of change has increased as the industry has started to accept new technology and work practices to streamline processes, gain efficiencies and keep their businesses competitive. This push has not only been driven by the industry but also the regulators, who are demanding more from fiduciary providers while at the same time embracing new technologies, such as the electronic collection and verification of due-diligence documentation. This alone is streamlining the onboarding of new structures and their ongoing due-diligence maintenance. The new technology is simplifying the certification process and expediting what can potentially be a drawn out and stressful process for families and trustees.

With employees now increasingly working from home, firms have been forced to accelerate the digitisation of information. Document management systems, if not previously implemented, are being prioritised so that documents can be accessed online rather than being physically placed in files. Across the industry, electronic signing is now common use; even banks are making allowances and accepting electronic signatures on instructions. All of this increased electronic data has seen firms explore the use of artificial intelligence to help file documents and information (information stored electronically is after all only efficient if it is filed in the right place).

Manual processes (such as payments and directors/trustee meetings, etc.) have been altered so that they do not physically take place in the same office and so information is shared electronically beforehand. This has been facilitated by advances in videoconferencing, with many meetings now being conducted over Zoom, Microsoft Teams, Google Meet and Skype. Although no substitute for a good old-fashioned face-to-face meeting, this technology is certainly proving to be an improvement on the telephone conferencing systems.

The increased remote access of information has caused businesses to look at how their data is stored, managed and accessed. In many instances, physical servers are being done away with and firms are moving onto the ‘cloud’ with robust processes around their data access and usage. Although logging in remotely has never been easier, the access to the information has never been more regulated and monitored, ensuring clients can retain peace of mind in relation to both the storage and access of their data (a topical subject for many families and their advisors).

Most importantly, the consolidation of the trust industry has resulted in once-smaller independent firms now having the capital to spend as they form part of a larger group. Access to capital allows them to invest in bespoke trust systems that are now being used industry-wide, with the level of expenditure dictating how much of the system is used. When these systems are properly populated, they are not only an excellent management and regulatory tool  allowing the close monitoring of client structures but they also allow efficiencies to be built into day-to-day administration. These efficiencies include streamlined financial reporting, workflows to facilitate basic administration, streamlined bookkeeping and reporting to facilitate international filings.

So, what does the future hold?

There is no doubt the use of technology will accelerate and add efficiencies to the industry, thereby removing many of the more inefficient manual processes. The increased access to relevant and useful management information will delight regulators as it will help the industry with its risk management and help keep service providers competitive. With this change and technology now being embraced, it will be interesting see how the trust industry continues to evolve over time.