As the world of fintech continues on a trajectory of evolution and disruption over recent years, the industry has become a hot topic in media and among companies using the technologies.
A 2018 executive survey (http://newvantage.com/wp-content/uploads/2018/02/Big-Data-Exe cutive-Survey-2018-Findings.pdf) found that nearly 80% of top executives feared that their firms were at risk of disruption and displacement from highly agile, data-driven competitors. Three-quarters of the executive respondents represented the largest financial services firms.
Venture capital-backed financial technology companies raised a record $39.57 billion from investors globally in 2018, up 120 percent from the previous year and tech firms are figuring out ways to get a piece of the $8.5 trillion-dollar financial industry market.
The Virtual Data Room industry alone is a $2 billion per year industry that continues to grow each year at 8% according to IBIS. https://investmentbank.com/virtual-data-rooms-industry/ Competition across industries is increasing the need among industry players to continuously improve their value to customers in order to avoid loss of market share. The evolution of the data room industry has changed the way people do business and now serves as a necessary platform for managing any type of project that involves confidentially and securely sharing information, not just the traditional use case of mergers and acquisitions.
These are the top five predictions of what’s coming to the Virtual Data Room industry in the near-term:
- User Experience: The traditional virtual data room industry hasn’t focused on improving user experience and their products are difficult and not easy to use for the average customer. They’ve tried to make some small improvements for the user with things like mobile apps. But most customers still use the web applications because mobile apps typically can’t be built to handle most data room functions. Mobile apps can’t The Top 5 Near-Term Predictions for Virtual Data Rooms yet replicate the full range of functionality of the web applications. Customers mostly use it for checking notifications or changing permissions for non administrative users.
- Integrations: Making products work easier such as a Google Drive, Dropbox, single signing services and other integration software that make using data rooms more seamless with other software platforms. integrations are just now coming into the forefront of the virtual data room industry after having been mostly ignored for many years. Having an API (Application Program Interface) that’s fully functional and can be utilized by customers for integrations or custom workflow development is the next emerging trend in this area. Companies like Caplinked are utilizing fully functional API’s and it’s making it easier for customer flexibility and workflow functionality.
- Services over Entertainment: Historically companies like Intralnks would spend a large percentage of their sales and marketing budget on entertaining clients to win new accounts and keep existing accounts, but customers today are seeking more value beyond entertainment. Customers want personalized and thoughtful on-boarding services and help setting up their virtual data rooms as a step by step process. When there are issues with their data room or their deal, they similarly want timely, knowledgeable, and personalized help to resolve any problems either technical or otherwise. Other services for clients like creating backup USB drives, email delivery assistance, and help with their compliance reporting are becoming a standard part of industry practices.
- Competitive Pricing: The industry is more competitive now and customers want to receive value for their money. They aren’t just going to accept whatever price their current vendor is giving them as they often did in the past. Companies like Caplinked, Firmex, and Ansarada are now giving customers more options to traditional vendors like Intralinks and Merrill. The Top 5 Near-Term Predictions for Virtual Data Rooms Some of these options include more flexible tier-based usage pricing, a la carte services, and self serve for smaller clients.
- Cloud Management: The shift to cloud management instead of using their own servers in gaining traction in the virtual data room industry. Historically companies like Intralinks and Merrill have been using their own servers because they believed that was more secure than the cloud. With the wide adoption of cloud management across industries and newer virtual data room competitors showing that the cloud is actually more secure, faster, and cheaper than having your own servers, the cloud is rapidly becoming standard. But all cloud management is not the same. Caplinked uses AWS and believes that is a great platform. But there are other good solutions out there for cloud management like Azure. Cloud management is about providing flexibility, speed, security, and managing data more efficiently to deliver better value and pricing to customers.