Digital transformation has become a watchword in wealth management. The switch to digital has been progressing for several years due to shifting demographics and changing user expectations, with the pandemic significantly accelerating this trend. Behaviour that would normally take several years to change, moved in a matter of weeks as we were ‘forced’ to adapt to new ways of working and communicating with each other.

Now we’ve all taken that great leap, our expectation is that digital transformation will be a central part of our wealth management experience going forward, leaving providers with the challenge of rapidly transforming their propositions to meet those expectations.

To buy or to build?

In the past, when selecting new technology, the decision came down to a choice between buying or building. Developing your own technology has the benefit of being completely bespoke to your needs, and puts you in charge of your destiny, but it’s often an expensive and time-consuming option - and it may be difficult to update as new innovations and regulations come along. It often means that launches of new solutions are based on a minimum viable product (MVP) at go-live, with a limited set of STP processes online alongside manual processes, while you continue to build a truly digital solution that maximises automation. Buying technology means you can take advantage of external expertise and experience as well as sharing in ongoing developments. It’s generally faster and cheaper to deliver, but more likely to be an off-the-shelf, or less personalised solution.

With advancements and wider proliferation of technology, such as APIs (Application Programming Interface) and microservices, you can have the best of both worlds: you can own your overall digital solution and embed third-party components into it to create a customised technology eco-system which you can quickly take to market. In particular, a Micro Front-End (MFE) framework allows you to build and control the digital solution, as well as integrate with multiple standalone front-end applications that stitch seamlessly together to create a single user experience.

Monolith vs Microservices

MFEs are quite a departure from the way wealth management technology has traditionally worked. Even in the digital space, firms generally have monolith systems, where a single solution exists covering data storage, business processes, and user experience. This limits the flexibility as providers are generally tied to using the same technology stack front to back, reducing the ability to introduce new components, and slowing down innovation.

However, more recently, microservices have started to replace the monolith backend. Using API  technology which standardises how different systems communicate with each other, you can build complex technology stacks which are made up of individual microservices, or pieces of software, that together create the overall proposition. This is far more flexible than the traditional monolith system, as each microservice can be tested, deployed, scaled, and updated or removed without interfering with anything else. It means you can be far more innovative, adapting easily to evolving customer and market needs, as well as changing regulation. However, MFEs take this one step further.

What are Micro Front-Ends?

Micro Front-Ends take the microservices concept of building a system out of individual technology modules to a company’s user experience layer. With this framework you can break down the way you want users to navigate and travel through your website or portal into individual journeys. These separate journeys can then be embedded into your existing digital framework to create a bespoke, easy to manage solution. It offers the ability to combine individual standalone front-end applications from one or more providers to form a unified web application, so you are no longer tied to using a single supplier or technology across the digital solution.

Combining multiple Micro Front-End apps developed in different front-end frameworks that perform different tasks allow you to quickly assemble and take to market a best-of-breed solution that is bespoke to your firm’s specific needs. These individual Micro Front-End apps could include user journeys covering quote and apply for ISA, pension accumulation and drawdown, annuity and superannuation, as well as maintenance and service journeys such as contributions, trading, withdrawals, managing pension income, or tools, interactive statements, dashboard widgets and more. Building a digital solution in this way offers almost limitless scope for customisation, using only the apps that cover your proposition or functionality gaps, rather than taking a ‘one-size fits all’ solution.

The MFE framework allows you to build dashboards, landing zones and views in line with your brand and strategy. Using a Global Experience Language (GEL) shared design framework, which is a system of standardised repeatable interaction patterns, complex interfaces can be simplified and delivered with a consistent user experience, effectively meaning you can use the same GEL to give a consistent user experience across multiple MFEs. This means the foundations, like the menu, typography and iconography, remain constant, while the content changes depending on the choices customers makes as they move through the site. Users can simply select a service from your menu, which then calls a corresponding third-party journey and displays it within the existing view. This ensures a seamless experience for the advisers, paraplanners and investors using your application as each third-party journey would inherit global branding and styling to maintain the perception of a single digital experience. 

Why do we need MFEs?

The MFE approach offers several advantages. Wealth management firms are often reliant on legacy technology and want to add new capabilities without the expense and upheaval of replacing everything at the same time. Similarly, there is a growing need to embrace new digital functionality, particularly given customers’ post-Covid expectations, without losing other functionality or incurring high development costs and lengthy build times often associated with traditional technology upgrade projects. Front-end technology is rapidy developing and customers demand that organisations provide more rich and engaging user experiences and continued browser support.  As such, the technology you build your apps in today may not be what you use tomorrow.  MFE's allow you to coexist, maintain, and upgrade components of your experience gradually. MFEs can support these requirements to enable different components to be built or updated by different teams - and deployed independently - so there is no need to test the whole site or take the site down when you are making changes.

MFEs offer all the benefits of outsourcing development, while retaining full control of the overall experience, helping you accelerate your digital transformation.