Are all-in-one solutions a good idea? What are real-time integrations, and how can they be used?
Interview with Brian McLaughlin,
CEO of Redtail
To go all in or not to go all in?
Figuring out a financial strategy is hard enough, but advisors have to worry about different tools and technologies that are being pitched to them as “super effective” and “super efficient.”
Some tech firms offer advisors all-in-one solutions. The premise is that if everything is in one place, daily routines and workflows will go more smoothly with significantly lower software expenses. Brian isn’t a big believer in all-in-one solutions because they’re difficult to manage and might result in mediocre products. Long story short, all-in-one solutions aren’t easy to get right.
It is possible to have an all-in-one FinTech company that builds and maintains its own solutions. The problem Brian highlights in this case is that one cannot be an expert in all of these tools and technologies. Again, it is possible to build two or more pieces of software and become experts in both. But what happens when resources are limited?
“I feel like even if I spent the energy and brought on a team to build another software component, it’s always two companies that will be battling each other for who gets the resources. How do we spin up innovation properly, and how [do] we operate it in parallel?”
This first scenario is optimal, but there’s also a second way to build comprehensive solutions: consolidation. Instead of hiring tens—maybe hundreds—of developers, companies are buying and merging with other FinTech firms. One example is Envestment, who bought PIEtech and MoneyGuide to bolster its financial planning technologies. This is a good strategy, if you can afford it; Envestment’s acquisition cost $500 million.
For Brian, there’s no need to delve into other spaces. Redtail is a CRM—central hub built to improve the practical efficiency of running a business. Brian’s focus is building out with integrations where they are needed. Redtail does have email and document sharing tools that are critical for managing clients and prospects, but Brian and his team also integrate with a number of other companies including Smarsh and Laserfiche.
Currently, the industry is crisscrossed with integrations that provide ways for companies and services to communicate with each other. So, instead of an all-in-one solution, it’s possible to exchange data through “push-pull” work. One company gives data, the other receives data, and vice-versa.
“The majority of the exchanged data is client-driven: ‘Oh, I want to send this to financial planning.’ Okay, click, it sends it.”
Brian is changing this model by adopting webhooks and other technologies that allow Redtail to send changes to data in real time and simultaneously update the information across all platforms. An example Brian highlights is if a client’s last name is changed in the integrated financial planning tool, the CRM and other tools will grab this information and auto-update its own database.
Brian calls these real-time updates a synchronization engine. Although this process is easy for one-to-one integrations, it becomes tricky when it is necessary to add another modular component (this can be thought of as Lego bricks). Redtail has already developed a way to sync Office 365 data fields in real-time with Retriever Cloud. Essentially, Retriever Cloud is an intermediary among APIs that compares data structures in real-time and makes sure they are all the same.
“I definitely see synchronization as the next step to getting these integrations to become real-time integrations to get that feel of the best-in-class product advisors want.”
Advisors are often attracted to all-in-one offerings because, frankly, they’re attractive. All the tools you want in one neat little package. However, it is rare for a single company to be experts in every aspect of finance. Therefore, the optimal route is integrations. Right now, Redtail is pushing the limits of integrations by developing what Brian calls real-time integrations, a way to bridge the data gap.
Brian McLaughlin is the CEO of Redtail Technology, a provider of CRM solutions for financial services firms. It handles specific challenges like log reporting, filing changes, and data synchronization. The firm recently launched its artificial intelligence solution as well as compliant texting platform, Redtail Speak. Today, Brian focuses on growing the firm and expanding its offerings.
Interviewed by Vasyl Soloshchuk, CEO and co-owner at INSART, FinTech engineering company. Vasyl is also the author of WealthTech Club, which conducts research into Fortune and Startup Robo-advisor and Wealth Management companies in terms of the technology ecosystem.