Choosing the right technology

When it comes to the all-important software systems for optimal portfolio management and regulatory compliance, web-based offerings are being touted as the way of the future.

Web-based software offers the advantage of facilitating access to data for intermediaries who are on the move, and for clients who want to check on their policy details from their homes. While there's no doubt that off-site access is beneficial, there are other factors that need to be taken into account.

Given the cost of acquiring software and the time spent learning how to use it, it's important that financial advisory practices shopping for financial needs analysis (FNA) software, and administrators and underwriters looking for a policy administration system, make the correct choice between available web-based and desktop solutions.

Web-based versus desktop solutions

In particular, one needs to consider the size and infrastructure of the business concerned, as well as the degree of control users of the system want over the data. With web-based solutions, data tends to be hosted by the software provider, which could leave some financial services companies uncomfortable in terms of data security and customer confidentiality.

The speed of access is also important. Web solutions tend to start up faster than their desktop counterparts, but it can take longer to access and process information, especially if data is being housed externally. Delays can also occur during peak times when the Internet is busy.

Connectivity and back-ups

Brokers need to consider the likely locations from which they will want to log in. In rural areas where broadband tends not to be available, leased wireless services or 3G will increase costs.

Software providers of web-based systems tend to offer convenient and automatic back-up facilities. These are, however, not always safe, leaving users exposed. In addition, truncation of data caused by a power failure during the automatic back-up process renders the entire back-up useless. Most web solutions also offer no access to check the reliability of backups - a real problem when data is needed to prove due diligence.

With a desktop solution, companies have control over their data and back-ups and can test the integrity of the system each time.

Best of both

Desktop systems tend to be the better option for smaller financial advisory practices and brokerages that lack the resources to overcome the short-comings of web-based solutions. However, some systems integrate desktop and web-based solutions, giving clients the option to install both and offset the disadvantages of each.

Description             Web Solution via Internet                       Desktop Solution

What is it?              Software applications running                More robust and full-featured
                              on the server with a simple front            software application as a standalone
                              end that runs in a web browser on         or in a network on a server and
                              the user's desktop.                                desktop PC.

User interface         * Web browser-oriented graphical        * "Rich" user experience;
                                  user interface;
                              * Only one can be opened at a time;     * More fields and details on the
                                                                                          screens;
                              * Screens cannot interact with each       * More than one screen can be
                                 other.                                                    opened simultaneously.

Application start up    Quicker.                                                Slower.

Speed of data access  Slower and delays when the internet    Qiuck and fully controlled by
                                   is busy.                                               company's server and LAN setup.

Control of data           None if data is hosted on solution         Full control.
                                  provider's server.

Remote exchange and  Via the internet.                                  Replication technology.
data access

Hardware                    Low as all data processing takes         High as all data processing is
requirements of            place on larger server.                        distributed between server and
workstations                                                                          desktop.

Installation                    None if hosted by software                 On each desktop.
                                    provider.

Reinstallations               No user interaction necessary.            User interaction necessary.
and updates

Connectivity                 Services needed from either                Replication via ADSL or dailup
                                    ADSL, or Neotel or 3G.                    for data access outside the office.

Data capturing               Preset and rigid.                                Flexible and interactive.
process

Cell phone                     Avialable, where a web browser       None.
                                      intergration is supplied.