Wed, 13/06/2018 - 15:07
Six years ago, Altus Consulting released a white paper, The Platform Machine: Tuning for Efficiency, examining the platform sector in financial services.
At the time they claimed that, despite ever increasing levels of Assets under Administration, all was not well in platform land.
Revenues were rising across the board, but costs were outstripping them in, many cases significantly so. Today, five years later there have been a number of platforms which have moved into profit, some of them significantly so and Altus has re-evaluated the current platform industry and come to the following conclusions.
Firstly, Altus found that the platform industry has taken off over the last five years but, for the majority, significant profits still remain out of range.
Secondly, margins have fallen, regulatory scrutiny has risen; platforms have had to deal with the turbulence. Thirdly, the survey found that automation is key but it can be expensive, so platforms need to be clear where they will get the most thrust.
This means understanding where costs are high, where they are likely to get higher and how to bring them safely back down to earth, the firm says.
Fifthly, outsourcing can get you off the ground faster but it will add to your payload over time and finally, the firm says that the price of flying is key but don’t forget the cost of your ground crew – they can ground your profits too if you’re not careful.
There is undoubtedly profit to be made in the platform sector, as evidenced by a few of the current high-flyers. The question is whether the rest of the pack can keep up – and how they can do so, the firm says.
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