Introduction
The Digital Illusion is Breaking
At STEP Arabia 2025, Cavenwell Group’s CEO Andrew Horbury opened his presentation with a simple but loaded question: What does it really mean to be a digitally enabled fiduciary business?
What followed was a frank and sometimes uncomfortable exploration of how far behind the fiduciary and trust industry has fallen on its digital journey. But it wasn’t just talk, the audience was polled live throughout the session, and their answers revealed just how wide the gap really is between perception and reality.
Poll responses showed that most professionals in the room believe fewer than 10% of firms in the sector have truly digital onboarding. Even more striking, three-quarters agreed that “digital” in this industry often means little more than electronically fillable PDFs sent by email.
So what does “digital” really mean in 2025? And what must change?
The great digital illusion in fiduciary services
When “digital” just means PDFs
Andrew’s first live poll question set the stage for the discussion:
Poll 1: What percentage of fiduciary/trust firms do you think have a fully digital client onboarding process — from KYC collection to approval?
- A. <10% – Very few have gone fully digital
- B. 10–25% – Early adopters only
- C. 25–50% – The sector is slowly catching up
- D. 50–75% – A decent number are digital now
- E. >75% – Most firms are already digital
The result? A staggering 51% of attendees selected “A” (<10%), admitting that true end-to-end digital onboarding is still the exception, not the norm.
In a second audience poll during Andrew’s talk, he asked:
Poll 2: When people talk about being “digital” in relation to client onboarding, what’s the reality for the majority of the fiduciary and trust industry today?
- A. Clients complete and return electronically fillable PDF application forms by email or through DocuSign
- B. Clients upload documents through an online portal, but staff still retype all the data manually
- C. A web- or app-based portal captures client data and documents, with automatic extraction and verification from uploaded materials.
An overwhelming 75% of respondents answered “A” – proving that the sector is still relying on clunky, manual processes masquerading as digital solutions.
These aren’t hypothetical insights, they came directly from the professionals in the room during Andrew’s live session.
Why true transformation still lags behind
The fiduciary sector is a paradox. It serves some of the wealthiest clients in the world, manages high-value structures, and operates in a compliance-heavy landscape, yet it lags significantly behind in adopting the technology needed to navigate that landscape efficiently.
Why?
Perverse incentives – Many fiduciary firms still operate under time-based billing models, where more hours logged mean more revenue. Automation and efficiency work against this model. Firms are rewarded and paid more fees the slower or less efficient they are at a process.
PE ownership and short-termism – An increase in private equity-led consolidation has created pressure to optimize for EBITDA over innovation and client experience, stalling investment in long-term digital infrastructure.
The false comfort of recurring revenue – Steady annuity income leads to complacency. If the bottom line looks fine, transformation feels optional, not urgent.
Fear of the unknown – Legacy IT cultures remain risk-averse. There’s still widespread hesitation to fully embrace cloud platforms, even when they offer more robust security and flexibility.
The result? A sector resistant to change, more comfortable with spreadsheets and signatures than APIs and automation.
Data dysfunction: The most expensive problem nobody talks about
In the fiduciary world, bad data is a hidden cost, one that erodes compliance, transparency, and profitability.
Data entry duplication, unstructured forms, and manual workarounds are still common across onboarding, KYC, CRM, and accounting. Every time a piece of client information is retyped, there’s an opportunity for human error and increased audit risk.
Worse still, many firms have no centralised data driven way to fully monitor sanctions exposure or client risk across jurisdictions and all client touchpoints. In one well-known example, firms had to literally open filing cabinets to assess Russia-related exposure during the 2022 sanctions response.
When data isn’t captured in a structured digital format, it can’t be used to power automation, alerts, or analytics. It’s simply stored, not leveraged.
Another common inefficiency? The obsession with certified copies. Despite the availability of real-time verification tools and public registries, firms continue to print digital documents and require manual certifications – an outdated process with questionable value.
All of this comes at a cost: time, money, compliance, and client trust.
APIs and AI: Two tools that could change everything
Much of the industry buzz centers on AI, but the real bedrock of transformation lies in a quieter, more foundational technology: APIs.
APIs allow systems to “talk” to each other in real time. With proper integration, data only needs to be collected once during onboarding, and then shared across KYC, CRM, compliance, and accounting platforms automatically.
This not only reduces duplication and human error, but it ensures consistency across every touchpoint.
As for AI? It’s already proving its worth.
Here are just a few areas where AI can drive meaningful value in fiduciary businesses:
- Automated data extraction from KYC documents
- Intelligent document generation using precedent templates
- Real-time compliance monitoring
- Risk profiling from transaction and registry data
Error rates from manual data entry can range from 2% to 8%, depending on complexity. By contrast, well-designed AI extraction models report error rates below 0.2% – a difference that could redefine compliance standards.
But there’s a catch: AI is already in use, often without firms realising it.
Employees in many firms are experimenting with public tools like ChatGPT and Claude to draft emails, summarize documents, or perform quick research. This phenomenon known as Shadow AI poses serious risks, including:
- Data leakage
- Lack of audit trails
- Inconsistent or unverified outputs
The takeaway? Firms must move quickly to govern how AI is used, before innovation outpaces regulation. At Cavenwell, as an early adopter of technology, we strongly believe in robust governance to shape the use of technology in organisations and manage risk.
The real path to becoming digitally enabled
Digital enablement isn’t about adopting flashy tools, it’s about embedding technology into your firm’s DNA. Here’s how to start:
- Prioritise data structure: Move away from free-text fields, PDFs, and attachments. Use structured digital forms and validation layers from day one.
- Leverage APIs: Integrate your systems so that data moves fluidly, not manually.
- Govern AI use: Establish clear policies, training programs, and secure enterprise tools.
- Embrace cloud platforms: Cloud security has matured. It’s time to let go of outdated fears.
- Focus on literacy, not expertise: You don’t need to become an AI engineer. But you do need to understand how these tools work and how they can (and can’t) be trusted.
The firms that thrive in this next decade will be those that bridge human judgment with machine capability, creating a seamless, secure, and smart client experience.
Conclusion: Time to ditch the facade
There’s no denying it: most fiduciary businesses are behind the digital curve, but they don’t have to stay there.
True transformation begins with honesty. If being “digital” still means sending PDFs by email, it’s time to reframe the conversation.
The future isn’t about tools, it’s about outcomes. And those outcomes are only possible with structured data, governed AI, and integrated systems.
The industry is standing at a digital crossroads. The firms that act now will earn more than just efficiency, they’ll earn trust.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
While these documents are accurate as of the date of issue, they may be subject to change in the future.
FAQs
How many fiduciary firms are truly digital?
Polls at STEP Arabia revealed that over half of attendees believe fewer than 10% of firms offer fully digital onboarding, with Cavenwell being a first mover and outlier.
What’s wrong with using PDFs and email forms?
They’re unstructured, prone to errors, and can’t be used effectively for automation, compliance, or analytics.
What makes data quality so important?
Poor data undermines compliance, introduces risk, and inflates costs. Good data is the foundation for automation and AI.
Are firms using AI already?
Yes often unofficially which presents a risk. Many staff use tools like ChatGPT without governance, creating data security and quality risks.
What’s the difference between APIs and AI?
APIs are the data pipes that move structured information between systems. AI makes sense of that data and automates decisions or tasks.
