From Chaos to Zen: Streamlining Wealth Management Data with Bob Santella

Our CEO Bob Santella speaks with Craig Iskowitz on the WealthTech Today podcast about the most impactful industry trends of 2024 and our new product, DataXChange.

Craig Iskowitz

Come on in. Sit back and relax. You’re listening to episode 273 of the WealthTech Today podcast. I’m your host, Craig Iskowitz, founder of Ezra Group consulting. This podcast features interviews, news and analysis on the trends and best practices all around Wealth Management Technology.

My guest for this episode was Bob Santella, CEO of BetaNXT. I’d like to read Bob’s bio here.

• Bob Santella has an extensive background in the financial and capital markets, with a career spanning over three decades. He has a deep history in the trading technology space, as well as a strong focus on Data Science and Technology Operations.
• Most recently, Bob was CEO of IPC systems, a provider of secure, compliant communications and multi-cloud connectivity solutions for the financial markets. His tenure at IPC was marked by a focus on technological transformations, including software and SaaS transitions while growing revenue and increasing profitability.
• Bob began his career at Price Waterhouse Coopers, spending eight years in a senior leadership role within the Personal Financial Planning Unit. He later served as Chief Operating Officer and President at Fox River execution, which was later acquired by Sungard.
• While at Sungard, Bob was eventually promoted to President of its global trading division, leading all trading software, data regulated entities and services. Following Sungard’s acquisition by FIS in 2015 he continued in his role as a division president with an expanded remit of products and solutions.
• Bob’s diverse background and collaborative approach have been instrumental in developing high performing teams and leading business through significant technological advancements.

Now what do we speak about? What’s going on at BetaNXT? We talked about some industry trends that Bob thought were most impactful in 2024 we talked about a new product BetaNXT is launching, called the DataXChange.

You’ll hear more about that in the interview, what that is, and we covered 2025, future challenges and opportunities and some things that are on the BetaNXT roadmap.

Now, before we go, let’s take care of a couple quick housekeeping chores. Please subscribe to this show wherever you listen to podcasts, so you don’t miss an episode. Check out our sponsor, the Invest in Others Charitable Foundation at investinothers.org. And now let’s kick this thing off!

Alright, here we go with our next guest. I’m excited to introduce Bob Santella, CEO of BetaNXT. Hey Bob, welcome

Bob Santella

Great pleasure to be here. Thanks for the opportunity to chat to you, your listeners.

Craig

Thanks for getting on here. I know you were really super busy over at BetaNXT as the new CEO. But before we jump over, where are you calling in from?

Bob

Right now, I’m calling from Southern Manhattan, the financial district, really the heart of our industry on a very cold day right here in Southern Manhattan.

Craig

Man, I’m feeling it. I’m in New Jersey, just a couple of miles from you. We’re here stuck in the frozen tundra. But I’m sure this will end at some point. So we can warm ourselves with this wonderful conversation about BetaNXT and the things you guys are doing. But if you could share with our audience, give us a 30 second elevator pitch for BetaNXT.

Bob

BetaNXT really formed with a vision to bring together wealth management transformation with a focus on data modernization and technology transformation strategies that bring together what we call connected wealth. What connected wealth means is exactly that – it connects clients to their providers, it connects providers to us, it brings together multiple systems into an integrated platform that really provides a seamless experience for our customers and ultimately their end customers.

Craig

I don’t know anyone who doesn’t want a seamless experience in connectivity. It’s something we’re constantly beating the drum on here at Ezra Group, so I’m all about it. Let’s talk about your role. So, you’ve been in the industry for quite some time, and you’ve just come on as the CEO of BetaNXT six months ago. What is it like? What are your initial observations? What have you learned in this first six months at this new company?

Bob

A couple things stand out. Some are new, some reinforce things I already know. One is that BetaNXT in particular has really strong partnerships with our clients. We’ve worked with most of our clients for decades. It’s a very symbiotic relationship. It really truly defines the word partnership in many ways, which that collaboration between what we do and our partner slash clients do, that’s a large part of how we innovate. It really is a very collaborative experience how we get feedback from them and industry which drives us to innovate more. It’s an iterative process and something I think that really kind of is a hallmark of the company.

Secondly, we listen to our clients, and we hear from our clients, and they hear from their clients. Their clients want a better experience – specifically defined as seamless experience, a holistic experience, integrated experience that brings together real-time data, better analytics, AI tools that actually increase productivity as well as provide better value added. Ultimately, they want better investment decisions that increase their wealth, and get better reporting and transparency to how their portfolios are performing.

Craig

Looking back at 2024, which we just closed the books on, what are some of the industry trends you have seen that you think are most impactful for the industry?

Bob

There are several. And some might think I've just grown in 2024, some are nascent. But one that stands out to me that 2024 really highlighted with a lot of our clients and other wealth management clients, how the other younger generation that are now invest in tune with investment. They expect a much more personalized digital experience with near real-time data and insights. People of our generation probably weren’t quite in tune with things like real-time data or digital. The younger generation wants that personalized digital experience; they’re demanding it from the industry. And that's driving, to large part, innovation among the industry, because there’s competition and people want to make sure they're keeping up with the younger generation. I think we're seeing a much higher and keener focus. I mentioned data quite bit because people want to be able to use this data in ways they haven't used it in the past. What that means specifically is taking data real time that gives them transparency into markets they weren’t exposed to previously – international markets, alternative asset markets, private markets, other type of investments that weren’t common a decade or two ago.

They want the access to it, they want better understanding and better reporting. Of course, we hear about AI that's not just unique to the financial or wealth industry. And AI I think in many ways offers a great promise for productivity increase and so forth. But we're still in the early innings in many ways of what the value of AI is going to be. In our industry and with BetaNXT to our clients, we're seeing AI, artificial intelligence and analytics, is basically not providing more value when it comes to taking data and give a predictive benefit to that data. In other words, giving a value to data and not just for reporting, not just black and white numbers, but what can you do with these numbers? Give me quicker access to information that in the past where maybe you would have got reporting on a monthly basis or quarterly basis, you get instantaneous data. And that matters to people who want to make investment decisions. They know where they stand today from where their tax basis may be, rather than wait to the end of the year. In our proxy business, Mediant, where in the past it was a very manual-driven business, using AI tools, we are able to not just scrape data and pull together information, in literally matter of minutes where it used to take months, just because of the AI capabilities. So again, seeing the advent of AI, now taking the concept and turn into reality is something that was a really big theme of ‘24, going to continue to grow.

Last I talked about quite bit, the seamless or connected wealth theme at BetaNXT, it's really important because that means many things, but specifically what it means for us is the ability to integrate into other systems within our customers, our customers use other systems besides BetaNXT. So, the ability to integrate but also integrate quickly in a way that's actually accurate is really important. Pulling together our systems into one platform rather than three platforms, we have three primary business lines that BetaNXT, a tax reporting and tax solutions business Maxit; a proxy and investor communications business called Mediant, and our core clearing and services platform Beta. Again, three separate businesses, but BetaNXT is the composition of those three business lines into an integrated platform. ‘24 is one where we saw an emphasis on integration, seamless, and API-driven.

Craig

I'm glad you, I was going to ask you to describe the three businesses I'm glad you did because I think a lot of people may not be aware of the new BetaNXT and these different parts of the business. Everyone who's been in the industry, as you've kindly mentioned, old as we are Bob, knows the old Beta clearing business, right? But understanding that BetaNXT is together these three businesses, proxy and Maxit, and clearing. Assume there are new technologies, refreshes, and integrations. So, I think that’s important to mention that.

Integrations we see as very important, as consultants to the industry, we spent decades struggling with integrations and one of the reasons why we built out the Azure Group WealthTech Integration Score was because not every firm is like BetaNXT, that has a drive and desire to build a seamless connected wealth platform that has strong and robust integrations. We encourage the industry to do more of that, so we really have to give you kudos for taking the lead there. So, speaking about connected wealth, there was a recent press release that BetaNXT put out about a new product called DataXChange. Can you tell us about that product, what is it, what’s behind it and how is it going to change the industry?

Bob

DataXChange is one of the most exciting things that we're doing, Craig. I know sometimes fresh releases don't do justice to the value because data in many ways is something that's under the covers and back-ended. It's not really retail facing in many ways as far as how it's managed and how it's parsed and so forth. But think of our DataXChange platform, which we did launch in 2024 in partnership with a firm called Snowflake, we're basically creating a structure and a platform that's the streamlining and the exchange and code level of data, both internal sources and external sources. So, every one of our clients, think of big wealth advisory firms and big banks, have all sorts of data they bring together. We're able to take all this data and bring it to a single platform and put it into the cloud, working with Snowflake, so now it's cloud-based. Clients are basically accessing all the data they need, and we call it a data vault or basically their own secure place, with strong governance around that data and their own private data vault, pretty much real time. We're taking the data in real time where previously it was end-of-day, or done in a batch-process. People now have actually find other ways that are more flexible and more malleable of how to use that data than what it means specifically. Taking data where clients want to see different types of reporting for their investments, how they bring multiple investments that used to be in different reports into a single report, how we maybe had a report to have an end-of-the-day PDF be a pop-up report that might be editable. These are all the type of things that are real-time and really innovated from the retail end.

We succeed when our clients succeed. At BetaNXT when our clients say, “How do you view your success for your clients? And, how can we help drive that success?” DataXChange is something that has resonated beyond our expectations because clients all need data. Their biggest challenge also is how do I manage this data in a cost-effective and at better value? DataXChange is our platform and a better way to do that. The more exciting for us Craig going forward, and we'll talk about this, what do we build on this platform that gives specific solutions and new products that takes that data and really does supercharge experience for our clients.

Craig

I was pretty excited when I saw that press release because it's another area that here at Ezra Group we've been beating the drum about for our clients and the industry is to own your own data and that requires vendors like BetaNXT to build the platforms that we can use so we can deploy it to our clients. Here's a way you can own your own data but one question I always asked is, is it agnostic and is it open architecture or is it only for BetaNXT data?

Bob

It's truly agnostic, it’s truly open architecture and so, of course, a lot of our clients use the Beta generated data which is where Beta platform comes from the clearing and trades and other activity where they use data. Our DataXChange platform, again in conjunction with Snowflake, is a very flexible platform that's completely agnostic and can integrate any form of data that the client is currently using or wants you use from any source, as long as we have enough time to work with the client on integration protocol and development, which typically is pretty quick. I'll tell you, just from the time we start talking about this Craig when we launched this middle of last year till now, we already have more than a half-a-dozen clients signed up as pilot users for this platform. So, it goes to show that there's actually a huge demand within the industry with our client base to really accelerate the progress on this platform and it really goes beyond our initial expectations.

Craig

Now, once I have my data into DataXChange, with whatever the data set is, whatever the source or the framework around that data, can I then automate it? What can I do with that besides just running a report? Is there any other automation that you're going to have available?

Bob

It's just about completely automated and the terminology that we use to define this, to simply it for your listeners, is that in the past we talked about file transfer and data transfer. Now we talk about data access. By having it in a real-time data vault in the cloud, it gives our clients, and then ultimately their clients, real-time access. If you talk about what can I do with the data, we're not worried about transferring multiple source of data anymore. It's always completely synchronized with one single source, so you get rid of the problem of data integrity and so forth in whatever high-integrated day you're dealing with. So wherever clients have this data, go beyond just reporting, goes beyond, this is where I talk about the innovation that we do with BetaNXT to our clients in a collaborative fashion. We're now taking that data and going to clients, all who have their own unique use cases and things they want to do with that data and say… We deal with corporate actions, for example. Every client has corporate actions to varying degrees. How can we now better manage corporate actions; that's a very data-driven function and process in a more automated fashion. The automation and the efficiency, for example, in corporate actions, as there's lot of use in DataXChange, has increased exponentially compared to the typical manual nature of what we've done in the past when it comes to that sort of process. And that goes across all of our businesses, whether it be our tax business Maxit, or Mediant, our investor communications, or Beta. DataXChange crosses over all three of those businesses. Good example in our Maxit business that generates ton of its own data in the tax area. And we're now rolling out DataXChange specific tax driven solutions, that in the past was a very manual and very time consuming — now in a matter of minutes we're producing value added reporting, value added data driven solutions that give more predictive and more value-added metrics to their clients from things like tax scores to tax optimization. And other things that give clients kind of a tax wrapper perspective around their investor portfolio.

Craig

Don't jump ahead. That's my next topic: tax-driven solutions. I really want to talk about that one in a second, but going back to corporate actions, that really rings a bell for me, back in a previous life when I worked for a large firm, the industry that we dealt with corporate actions, such a nightmare, having to manage them and having to bring the data in and then understand each provider was providing a different format. We didn't really have the right process and we missed things. So that's a little-known area, sort of a backwater, but super important when it comes to managing your portfolios, if your corporate actions processing has got a glitch that could cause some serious performance problems, clients will not be happy. Is there's something else around corporate actions that BetaNXT has done, maybe when it comes to AI?

Bob

Yes, we've launched in conjunction with DataXChange last year and where we’ve really invested a lot of money, is this specific corporate action project that is in tandem, in conjunction with DataXChange. By that I mean the thrust of what you discussed is corporate action is a super critical process for every firm. It's behind the scenes for whether it be a merger, a company calling a bond, a special dividend payment. These are all types of actions that really have low or no margin for error, they have to be accurate, even if it's not apparent to the end-retail customer, it affects that customer. Most of the firms you talk about from our generation used to have dozens of people, sometimes just in some back-office basement working on the heavy manual process that involved corporate actions that in and of itself created the human error possibility as well as just very time-consuming part of that function. What we're doing with AI now is that we're able to automate what we call the “scraping of data”, combing through literally millions of documents, dealing with customer databases, SEC databases, other things where your pull information. We just take months of human time, now it takes minutes or hours of automation, pulling the information into something that provides much more accurate experience when it comes to corporate actions, super exponentially quicker experience in corporate actions. And something that’s allowed our clients to spend less time on and focus their time on more value-added functions and not just have dozens of people doing something that was a manual process in the past. We've had rave reviews from our clients on the progress we've made in this area. Corporate actions affect every single participant in the marketplace. Something they have to do and they want to do better. AI hasn't made a little bit of difference here — it has made a lot of difference as far as how clients now see the value.

Craig

One question I had: if I've got an enterprise client and I've been pushing to implement a data management solution, but they're not a BetaNXT client right now, can they still sign up for DataXChange and get that implemented without being a Beta or a Maxit client?

Bob

Absolutely. Our initial focus, because it's been a fast-moving initiative for us from launching a few months ago, we've gone from concept to development to now fully production in a matter of three to six months; the focus has been on our initial Beta, Maxit, Mediant, or BetaNXT client base. However, we're already getting inbound inquiries from non- BetaNXT clients. So, for us, it was exciting. As I mentioned earlier, we’re agnostic and can serve those clients. And the fact that we now get a reputation for having the expertise to manage this, then that creates additional opportunities now for our company to expand our services beyond data exchange to those clients. So, from an unselfish point of view, we want to be the data expert in industry. From selfish point of view, we want to expand our capabilities beyond DataXChange to new clients, new logos. DataXChange is one way we're doing that.

Craig

Fantastic. So now I want to roll back to what you mentioned, the tax driven solutions. Can you explain more about that? You know, when it comes to the tax driven, how AI is driving that and what could clients see differently now and how would that improve the way they're doing tax for their clients, having this AI driven solution from BetaNXT.

Bob

Yeah, and I jumped on that earlier, Craig, because as you might be able to tell, I'm really passionate about this. It's not a sexy thing, but tax is one of those things that really add value to the client experience because it can save you money. It can help you make better investment decisions. It gives you a perspective on how to evaluate your portfolio through a different prism. I will tell you that, and as you know from your experience and your listeners probably know, tax basis calculation, what you bought a security for and when you sell it in tax reporting, they're required by law. So, every client needs to provide at the end of the year or throughout the year, tax basis calculations and tax reporting, that's where you heard these forms like 1099s and K1s and other things that come out to our clients. We're a leader in that space and especially in a tax basis area, we're one of a few firms that have the expertise in the area to provide, not just end of the year, end of the quarter.

Where AI is helping us is in a couple different areas. We're now able to provide pretty much real-time basis calculations to our clients. If somebody wants to pop-up on the screen: where do I stand today and get a snapshot of realized and unrealized gains in their portfolio, immediately we can do that. And having access to that information, you can make more real-time investment decisions and give your perspective on where you want to go with this portfolio. What's more exciting with us and we're doing this with a couple partnerships with people who have really strong AI engines, we're taking our tax data and we're providing what we call predictive analytics.

And there's two areas in particular we're using this data that our clients really find intriguing and exciting. One is we are able to give our financial advisory clients a better sense of what attrition they may have within their financial advisory base. For example, financial advisory firms want to retain their advisors…using our tax data and use a regression analysis with our AI, we think with an over 90% confidence level we can give them a score of what their attrition risk might be as far as losing advisors. That's something that's kind of new. It goes well beyond tax, but it's using our tax data to generate that score. That's something we've been demoed now with couple of our clients.

On the tax-specific area of AI, we're now able to generate what we call simply a tax-score, or kind of tax-optimization-type metric, which just takes the tax data and not just reports it but gives you a better idea of where you stand a tax-optimization point of view with your investment portfolio. And what that means specifically, are you taking advantage of long-term capital gains versus short-term capital gains? It's a lower rate of long-term capital gains. Are you taking advantage of qualifying dividends versus non-qualifying dividends, much lower tax-rate on qualifying dividends? Are you optimizing as far as withholding on international securities? Because of international securities affects tax withholding. We're pulling those together in an integrated fashion. That's the value add. It's not just reporting but saying, how can we actually help your clients save money and understand the tax-aspect of their investment portfolio.

Craig

I'm a big fan of scoring in our industry, and as a group we created our own integration score called the WealthTech Integration Score to score how well applications integrate with each other. So when I hear your scoring stuff, my ears perk up as well. So, you mentioned tax optimization scoring. Is that at a portfolio-by-portfolio basis as it roll up to the household level as well.

Bob

At this point, as we evaluate this for our clients, it's pretty much done on a portfolio-by-portfolio basis. Think as each firm again has sort of their own unique perspective about what they want to communicate to their clients, how they structure statements to their clients, and how they kind of report out to their clients. But I think every one of the clients are intrigued by and some actually gone to second and third base on this, Craig, where they want to take these scores and the value add. Now, we have to make sure that we're not in the business of providing tax advice because we're not. And our clients are very careful to make sure they have the regulatory and legal thing; we're not providing tax advice. But on black and white type items, where we can determine where to actually take advantage of a lower tax rate or a lower tax withholding number or a type of gain, we want to make sure people are aware of that. I think right now, what clients are saying is how can they apply it to the end portfolios? At some point, I expect that anything we're seeing, if it makes sense, we're going to see the process to accelerate much quicker than it's accelerated up to this point in time.

Craig

Awesome. Advisors are looking for ways to differentiate themselves and offer more value-added services for less cost and less effort. Don't want to spend any more time on it, they just want to be able to deliver it. So having this built into the underlying platform seems like a super easy way to offer that value. You mentioned a second score which I'm calling the Advisor Attrition Risk Score. How does that work exactly and if I’m a broker deal with a large wealth management firm with hundreds of advisors, thousands of advisors, what data am I going to get and how do I act on that?

Bob

Yeah, so think of what we do at BetaNXT, we're with our tax division or our Beta division, we actually generate terabytes of data every day that cover a host of activity, a wide spectrum from dividends to trading activity, corporate action activity, and so forth. In our tax business, what we're doing, we're taking basically most of that data, we are using proprietary models from a third party in many cases, and taking the data, and we're basically providing a three month look back, a regression view three month look back, taking multiple factors, and based on several factors that would determine how clients are trading, how clients are interacting with the financial advisor, as they're going to change, and their activity levels, it then generates a range of, you now may have risk with this financial advisory group or financial advisor that their behaviors change the point that they're at risk of leaving. And as you know from the industry, it's been a growing industry the last couple of decades, particularly the last decade, so that's been good. But there's also much more competition among the advisory firms. And usually there's low barriers for advisors leaving one firm to another. And firms obviously want to keep their advisors. That's how they make money by growing their AUM. So, when they get this type of score, it's still on the stage of making sure it's tested and it pans out, but the early results are very promising here. The next set of questions, and now they know I have this risk, I know why the risk, what do I do about it? So that's really up to the financial firm to make that decision, if they understand the reason why they might lose advisors and what drove that, that's great. But more importantly, they want to retain your advisors. It’s up to them to make decisions on how to handle that.

Craig

So is there a certain number? Is it one number or is it a range that you say, well, if they're in this range, first of all, is it out of a hundred?

Bob

It's out of a hundred and is typically in a range.

Craig

Right, does the higher number mean they're more likely to leave or less likely to leave?

Bob

Less likely.

Craig

Right. So, the lower the score, the more likely they are to leave. And so, if it's below 30, then you should watch out.

Bob

Yeah, well, and obviously goes down, and it’s probably weighting. So, you start going down and eventually it becomes self-fulfilling and obviously if you get to zero, you've lost that person. But because AI is so relatively new…and you're dealing with humans when you’re talking about advisors, so even though you're getting scores based on fairly accurate data, people change their minds. The market has an impact on behavior as well, you know. We can control BetaNXT as well as our clients, but we don't control movements in the markets and interest rates and liquidity and other external and macro risk that impact things. When understanding the macro and market-type risks I think the clients we demo this to, as we've gone down the path, they're excited about it. It's something that they haven't seen but they want. You think about what you want to do as a financial advisory firm, you want to grow your assets ultimately and you grow your assets two ways. The market increases the value of assets, and you bring on more assets through more advisors and they bring more clients onboard. Any way to retain your clients is a positive thing.

Craig

I'm a little disappointed Bob that you can't control interest rates, and you get that product out, give me the interest-rate control product. Want to be able to crank it either way I want.

Bob

Well, I was thinking of applying for the head of the Fed but I'm happy with my job at BetaNXT right now for the time being.

Craig

Get this under control first then we'll bump you up to the Fed. So we're almost out of time. Let's talk about strategic priorities. What's coming in ‘25? What's some innovation or some ideas within the roadmap that BetaNXT clients can expect to see this year?

Bob

A couple of things. Some things aren't always so apparent, but they said our business which isn't always deemed as being, quote-unquote, sexy is super critical to our clients. So, on our main platform for clearing, the old Beta platform, that comprises our largest BetaNXT business, where we're now actually spending a lot of money a lot of time on upgrading our core platform for operations. It doesn't sound sexy, it is if you think, Craig, our generation a lot of people in operations area use what we call “green screens” all single screens. We've now gotten away from that by the multi-million-dollar investment on something called Ops Workbench. Ops Workbench is a modular cloud-based way for our clients at the operation level to much quicker, much more accurately, and much more modern way, access to the operation functions needed within the firm. Whether it be, again with the corporate actions, a trade activity, dividend, and so forth — we run away from the green screens and old operation systems that still work — into a modern application called Ops Workbench and we built upon Ops Workbench in a modular fashion to start expanding functionality, depending on what a firm’s needs are.

Talk about the tax area again. Basically, it's cost basis and reporting, that's the foundational solution, we offer predictive analytics and so forth. We want to build out an even more robust reporting structure. What that means particularly when we talk about reporting, that's just 1099, which is the mainstay in reporting, it's having the ability to serve as every reporting requirement in every state, not just federal, where it's required, and every type of entity. We have most of that covered and we're going to make sure we have 100%, or almost 100% coverage this year, and make sure we have any sort of needs that our clients have from a product and reporting point of view, we want to be able to serve them from both the generic reporting, but also quicker, like I said, in more real-time fashion. In our Mediant proxy division, we talked about how AI is benefiting that. We're seeing just even the last couple of weeks since the holiday season, and going to this year, as we entered, we call it proxy season, which is the most exciting time of the year for our Mediant business.

Craig

It's the most exciting time of the year.

Bob

I can hear them singing that song right now down to Cary, North Carolina, where they're based. They do get generally excited about this time of year. That's our busy season. They're pumped up to do it. Last year we got hundreds people working in that area, it’s been down to using AI to put together proxies, putting data together. So what we're doing more in that space, we’re taking AI capabilities that we developed a few months ago, expanding those capabilities out from the Mediant division across the other two at BetaNXT, Maxit and Beta, taking the same general logic and AI principles, instilling best practices and an integrated experience for the whole business.

Craig

Bob, I love your passion and thanks for sharing that roadmap. Fantastic Bob. You said it all. Thanks so much.

Bob

Craig, I appreciate the time from you and your listeners, and I want to congratulate you on your success and everything you’ve done throughout your career.

Craig

Hey, I’ll take that. Thanks, Bob.

Source: WealthTech Today