The Hidden Costs of Delaying Back-Office Projects

Janeesa Hollingshead, Executive Editor, Wealth Solutions Report

CogniCor CEO Sindhu Joseph Cautions Against Delaying Implementation of Back-Office Automation, Discusses Causes and Solutions

Sometimes you invite friends to your house who know a little too much – experts, or at least advanced novices, in home maintenance issues. They point away from the backyard barbecue to the loose shingles on the roof. They step on a creaky board and describe in great detail how floors cave in. 

Easy-to-ignore maintenance issues will cost you dearly if you neglect the proverbial “stitch in time” that saves nine. Likewise, financial advisory firms that delay necessary upkeep and improvements for long-term planning can discover major problems after leaving needful tasks unattended for months. 

While it’s easy to let back-office automation fall to a lower priority or slow due to approval processes, a choice to take no action is still a choice – and your losses in productivity and unhappy clients can accumulate.

Sindhu Joseph, Founder and CEO, CogniCor

Digital assistant provider CogniCor knows the wealth management back office well through serving firms by implementing and maintaining artificial intelligence-based solutions for automated client communications.

We caught up with Sindhu Joseph, Founder and CEO of CogniCor, to learn more about the causes and effects of back-office automation delays, as well as solutions for firms to stay on track with their long-term automation goals.

WSR: What are the typical reasons for wealth management firms deciding to place adoption and implementation of a back-office automation solution on hold, and how long can such pauses last before these initiatives are restarted? 

Joseph: Most firms recognize a stark reality:  Automation of back and middle office platforms is the only way they can scale growth and maximize operational efficiencies in an industry landscape defined by tight labor markets, innovative technology solutions and skyrocketing costs of manual approaches to supporting financial advisors. 

The reasons firms choose to pause automation initiatives seldom relate to strategic or “big picture” concerns. Instead, it comes down to tactical issues. Some have too many projects and insufficient management and IT staff bandwidth to cover them all simultaneously. This results in project prioritization, with initiatives like automation being delayed.  

Often this involves a firm making the decision to complete a CRM rollout before taking up automation. Other major projects may also need to be completed as a prerequisite to working on automation, including content management systems for managing policies, regulations and SOP articles. Automation also involves integration of multiple existing systems that puts a tremendous burden on IT staff, which can cause a major bottleneck. 

While the reasons to pause innovation are frequently tactical, they may still cause major delays that can range anywhere from six to twelve months. Or even longer.  

WSR: What are the potential opportunity costs for firms that choose to delay adoption and implementation of back-office automation solutions for anywhere from six to twelve months? 

Joseph: Financial advisors and the clients they serve have higher expectations for a firm’s technology stack than ever before. They look at the ease of doing business they experience with online retailers, banks and other service providers they interact with, and look for the same from their wealth management firm. 

Every day a firm delays providing an exceptional digital experience is an opportunity to lose advisors and clients to a competitor with better technology. Nothing will drive an advisor into the arms of another broker-dealer or a client to a different financial advisor more than long wait times, clunky interfaces and overall poor service.  

Clients won’t stay on hold for long.

So, beyond elevated expectations, a lack of service scalability for firms without state-of-the-art technology automation is one of the major impediments these organizations face to achieving their growth ambitions. Customer decisions on where to do business are made continually, and poor impressions are hard for a firm to overcome. 

We all know that it’s exponentially more expensive to gain a new customer than it is to keep an existing one. That means that even a six-month delay in rolling out new technology can have an impact on a firm’s bottom line. 

WSR: It seems like even when firms decide to proceed with implementation of an automation initiative after a six-to-twelve-month hiatus, it can take anywhere from one to two months just to get the process restarted again. Is this true, and if so, what are the reasons for this?  

Bogged down by red tape?

Joseph: Any technology initiative that is intended to generate significant scalable growth and operational efficiencies is never going to be a switch that you can flip on or off at a moment’s notice. Automation generally means the integration of multiple relevant systems. Coordinating all this with limited in-house staff can be a challenge. 

Projects often get bogged down by delays in getting approvals for each element of the integration. This is a typical scenario that is often hard to avoid. Luckily, most automation platforms are low code/no code – or should be designed that way. However, while coding may be minimal, implementation also relies on an initial configuration, which can take some time. 

WSR: Instead of placing automation initiatives on hold, what alternatives do you suggest for firms that enable them to proceed with such initiatives while addressing the usual spectrum of concerns that are driving the perceived need to take a pause?

Joseph: It’s all about prioritizing and finding a balance between near- and long-term ROI, with the understanding that back and middle-office automation is where firms need to be over the long run to grow and remain competitive, regardless of their size or business model.

With that said, firms need to embrace automation as a strategic advantage, not just a cost, and prioritize accordingly. Some firms have been burned by implementations of AI and automation platforms that haven’t gone too well. Based on their negative experiences, they are skeptical of immediate ROI. But done correctly, automation implementation can produce short-term ROI, as it frees up back-office support teams.

Technology can’t do all the magic!

Firms can also take advantage of vendor platforms built for the wealth management domain. This would give them a way to target automations that provide greater impact with minimal resources.

Firms also need to understand that most automation initiatives rely on people, process and technology – in that order. They should not expect technology to do all the magic, while not empowering people to make the right decisions and initiate process changes to ensure success. Verticalization of automation platforms is key, and firms should look for vendors who understand their business problems, priorities and opportunities to design appropriate solutions.

Janeesa Hollingshead, Executive Editor at Wealth Solutions Report, can be reached at

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