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FCA to explore platform tech problems

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FCA to explore platform tech problems

The Financial Conduct Authority (FCA) will whether the growing trend for platforms to outsource their technology affects charges and innovation. 

Currently a number of platforms including Old Mutual Wealth, Ascentric and Fidelity FundsNetwork are 'replatforming' client assets to third party technology providers such as FNZ, GBST and Bravura.

This morning the FCA said it would consider the impact of such switches as part of its platform market study

'In doing so, we will explore whether technology providers create barriers to entry and prevent platforms from being able to compete to innovate and offer value for money to consumers,' it said. 

The regulator said 'the technology market appears to be concentrated' with only a limited number of providers to choose from. As a result it will consider whether new entrants to the platform market face high costs to find technology, and whether the limited choice mean they struggle to offer anything new. 

Changes in platform technology have become a focus recently after Old Mutual Wealth pulled out of a contract with IFDS due to delays and spiralling costs. It instead signed an agreement with rival technology firm FNZ, which already provides technology for platforms owned by Standard Life, Aviva and Zurich.  

Aegon's acquisition of Cofunds has also driven interest in the technology behind platforms, as it will move assets to a system offered by GBST. Earlier this month Aegon chief executive Adrian Grace told New Model Adviser® he expected the FCA to focus on platform technology due to the changes in the market. 

Read the FCA's terms of reference for the platform study here

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