8-9 years ago we signed our first banking agreement , partnering up with Skandiabanken (now Sbanken a DNB concept) to deliver back end robo savings logic that that ended up becoming the worlds first and only Certified Robo Advisor (https://www.finaut.no/english/worlds-first-authorization-achieved-robo-advisor/)
Since then we have delivered Investment Advisory solutions to major banks and pension providers across the Nordic region. From Storebrand and Sparebank 1 gruppen in Norway, to Local Tapiola in Finland and Ålandsbanken in Sweden, Åland and Finland to mention some. What they all have in common is that they, for the most part, have quite large tech-departments, yet still rely on companies like Quantfolio to deliver technology and innovation.
Banks have long been pillars of stability in the financial system, but when it comes to technological innovation, many find it challenging to be a forefront for many reasons. The banking industry is known to be conservative, built on risk aversion (enforced by strict regulations) and compliance rather than agility and rapid innovation. While innovation is key to staying competitive, especially when they increasingly are being challenged by new players, banks face several structural and cultural challenges that hinder their ability to move quickly on the technology front. Instead of attempting to develop and maintain innovative software in-house, a more effective approach is to partner with a specialized vertical SaaS provider that can tailor solutions to the bank’s specific needs.
The Structural Barriers to Innovation for Banks
One of the core reasons banks struggle with innovation is often attributed to their hierarchical and compliance-driven structure. Unlike tech companies that evolve with experimentation and iteration, banks operate in an environment where the cost of making a mistake is higher than the cost of maintaining the status quo. As long as the bank remains profitable, there can be little internal pressure to take risks or drive significant change. Moreover, the lack of a strong innovation culture means that even when new ideas emerge, they often get lost in layers of bureaucracy.
Banks are also burdened with increasingly stringent regulatory requirements. For example within insurance and wealth, regulations like MiFID-II (Markets in Financial Instruments Directive) and the IDD (Insurance Distribution Directive) impose strict suitability and transparency requirements. Any new system must comply with intricate and evolving regulations, adding an extra layer of difficulty when adapting to growing customer demands.
The Increasing Importance of Wealth Management and Insurance
Historically, banks have focused on traditional services such as credit provision and mortgages—areas where legacy systems, though in many instances outdated, remain sufficient to maintain compliance and operational efficiency. However, structural changes in the financial industry are shifting revenue streams. Wealth management and insurance are becoming increasingly important for banks looking to expand their business and strengthen their client relationships.
To capture these opportunities, banks need to adapt to customer expectations. Today’s customers demand personalized services, digital-first interactions, and seamless integration of human and automated advisory services. Many customers favor using a digital app to manage their wealth, yet still value access to professional human advice when necessary. Banks should adopt hybrid solutions that combine digital tools with the ability for customers to connect with financial advisors in a flexible and convenient way.
Why Banks Should Rely on Vertical SaaS Providers
Building flexible and durable software systems from scratch is costly, time-consuming. Moreover, any new system must be built with compliance in mind, adding another layer of complexity.
Instead, partnering with a vertical SaaS provider that specializes in building and maintaining flexible, durable software solutions tailored specifically to the problem the bank wants to solve can be more efficient and cost-effective. A SaaS provider can tailor its software to the bank’s needs, ensuring that compliance, client experience, and operational efficiency are all optimized. This allows banks to:
Stay focused on their core business – Instead of diverting resources to building technology, banks can continue to strengthen their client relationships and financial expertise.
Ensure compliance – A vertical SaaS provider with deep industry knowledge ensures that the bank remains compliant with MiFID-II, IDD, and other regulatory frameworks.
Staying on top of changing demands - A vertical SaaS provider is specialized and can concentrate on continuous updates and redevelopment to keep pace with evolving regulations.
Expand revenue streams – Banks can efficiently enter the wealth management and insurance market, offering valuable services to their existing customers while attracting new clients with a broader range of offerings.
Quantfolio as a Vertical SaaS Provider
Quantfolio is a leading vertical SaaS provider with a deep understanding of the challenges banks face. We specialize in providing wealth management and insurance offerings. Our product suite is highly adaptable and flexible, enabling banks to set up custom solutions while ensuring regulatory compliance and great client experiences. Our clients include renowned Nordic banks such as Storebrand, LähiTapiola, Sparebanken Vest, Ålandsbanken, and Sparebank 1 Gruppen, among others.
The Future for Banks in Wealth Management an Insurance: Technology-Enabled, Client-Focused
The ability to deliver personalized, compliant, and efficient services can distinguish leader banks from the rest. Clients now expect digital solutions that maintain a trusted, human connection when necessary. Banks that partner with a specialized SaaS provider can offer this hybrid approach, combining digital-first platforms with personal advisory services.