Investment platforms’ operational resilience ‘maturing’ as focus turns to complex dependencies

The UK investment platform industry’s operational resilience is maturing, as firms move past baseline regulatory compliance towards developing a greater understanding of how they will perform under stress, according to a report from The Platforms Association.

Its annual benchmarking report, in partnership with Alpha FMC, found there were four broad ‘resilience archetypes’ across the industry, which were moulded by scale, complexity, and dependency structure, rather than platform type alone.

The organisations argued that platforms should benchmark themselves against platforms with similar operating characteristics instead of relying on size or assets under advice (AUA) alone as a proxy for resilience maturity.

Resilience cost and burden did not scale predictably with size, the report noted, with participants reporting a broadly similar number of third-party dependencies regardless of size.

Third-party dependencies averaged around 17 for smaller firms and approximately 19 to 20 among mid-sized and large firms.

Therefore, smaller platforms could be facing a supplier landscape that was almost as complex as their much larger peers.

Respondents identified cyber threats, third-party concentration, and the adoption of AI as among the top current and emerging concerns.

Although firms were generally more mature in managing direct suppliers, the report indicated a rising need to understand fourth-party dependencies and to treat supply-chain mapping as a strategic concentration discipline, rather than just a compliance exercise.

The report stated that these dependencies were becoming a shared, market-wide consideration as common technology, infrastructure, and service providers become increasingly integrated across the industry.

"Resilience cannot be built in isolation,” commented The Platforms Association CEO, Keith Phillips.

“The investment platform industry is deeply interconnected, and increasingly, the resilience of one firm depends on the resilience of the ecosystem around it.

“That makes collaboration essential so it’s important to share insights, challenge assumptions, and build a clearer picture of where dependencies and concentrations really sit.”

Alpha FMC partner, Ben Shenkin, said the research pointed to a more connected next phase for operational resilience.

“We’re seeing better benchmarking, greater visibility of dependencies, and stronger collaboration across the industry,” he continued.

"For UK investment platforms, resilience is no longer a question any single firm can answer alone. It depends on how well the industry understands the ecosystem it relies on, and how ready it is to act on that understanding together."

Quilter director of operations and The Platforms Association Operational Resilience Workstream co-chair, Maxine Hulme, added: “One of the most striking findings from this year's research is that operational complexity doesn't necessarily correlate with size.

“Smaller platforms are often managing almost as many critical third-party relationships as much larger firms, which reinforces the need for a proportionate approach to operational resilience."

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