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Paul Doocey
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A Wealth Of Opportunity

Clean data will open the doors for cross selling in financial services.

Say the word "convergence," and large financial institutions such as Citigroup, Charles Schwab and USAA immediately come to mind.

But the potential windfall from converged financial services operations is not lost on small- to mid-sized banks, brokerages and insurance companies. Although smaller financial enterprises may lack the wherewithal to compete with national giants on a grand scale, some have found success specializing in a specific aspect of convergence. For example, Rainier Pacific Bank (Tacoma, $465 million in assets) now offers its 43,000 customers in the Pacific Northwest a full range of banking services, property and casualty insurance, and financial planning and investment services. Its goal: become the dominant regional institution in the wealth management arena. "By possessing a complete view of the customers' financial information, we can have a better understanding of their current outlook and provide financial products to meet their long-term goals," says John Hall, president and CEO of Rainier Pacific Bank.

A key component to Rainier Pacific's converged wealth management strategy is technology. The bank is relying on Fincentric's i-Wealthview suite of products to manage its converged enterprise and present customers with a single point of access to their portfolio. "We were impressed with Fincentric's vision and product development direction, which are very much in line with our strategic business goals and vision," says Hall.

This vision, according to Fincentric (Richmond, BC) president and CEO Mike Cardiff, revolves around the belief that in order to take full monetary advantage of wealth management and financial-services trends, more and more financial institutions will move toward converged operations.

"Converged financial services are already the norm in Europe, Asia and elsewhere in the world," according to Cardiff. "These institutions have found out that one of the best ways to increase profitability going forward is through better management of a customer's assets, and customers would prefer to have all these assets handled by one trusted institution."

Cardiff suggests a good example of this approach is the strategy employed by Boston-based Fidelity Investments. Years ago, Fidelity Investments decided the best way to grow was through the management of customer assets instead of the more traditional means of transactions fees and float charges. By focusing on attracting and managing the assets of affluent customers, Fidelity greatly enhanced its profitability and has attracted more than $1 trillion in client assets.

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Spending Trends

The worldwide financial services industry spends $225 billion on IT each year.

By 2005, $70 billion of this yearly spend will be devoted to wealth management technology.

Sources: Fincentric and TowerGroup

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