How technology is revolutionizing specialty asset management in banking
A large and growing market of mineral interest owners relies on banks and trust departments to manage their assets. Banks and the highly-personalized services they provide have been a cornerstone of specialty asset management since the beginning of the oil and gas industry, helping family offices and high-net-worth individuals navigate mineral rights management complexity.
If you are part of a financial organization that offers mineral rights management services, digital transformation is the key to delivering higher service excellence and efficiently managing customer portfolios at scale. In fact, according to a 2017 PwC survey, 77% of respondents expect to increase their financial technology innovation efforts over the next three to five years. Does your organization have a mineral rights management digital transformation strategy?
Status quo mineral rights management and the cost of doing nothing
Banking is an industry built on trust and personal relationships. Some fear technology hinders the ability to deliver the type of personalized, quality service customers expect. In reality, technology benefits banks, financial advisors and customers, even more so for specialty asset classes like minerals, royalties and non-op working interests. Transforming mineral rights management with digital innovation is essential to help you build that trust, providing a way for your employees to work faster and more efficiently while enhancing customer experience for the services you offer.
Oil and gas market cycles and the global pandemic continue to inject uncertainty for specialty asset management. Organizations fail and lose customers during times of uncertainty because they continue to invest in mineral rights management processes that have worked in the past. Instead, specialty asset management teams should double down on digital transformation and invest in the technology and business automation that will set them up for growth in the future.
Customer expectation is an important driving factor for banks to upgrade their mineral management technology. Just as online banking transformed personal checking and savings from paper-based processes to on-demand digital account management, today’s mineral owners expect more than a printed monthly or quarterly report from their mineral manager.
Your customers have more options than ever. Failing to modernize your portfolio management, revenue processing, A&D and auditing workflows can only lead to a dwindling oil and gas practice as customers simply open an account with competitors who can outmatch your team. Organizations that can overcome resistance to change and embrace digital transformation will reap the benefits of increased market share backed by superior technology, automation and data.
Specialty asset management demands purpose built solutions
Consider your existing processes for managing customer check details, preparing reports and auditing portfolios for missing wells and underpayments. What could you do differently to optimize the time your highly paid mineral managers spend on critical workflows? These include:
- Identifying mineral assets held in trust and agency accounts.
- Tracking revenues, operating expenses and providing customers with reporting.
- Negotiating leases and other oil and gas contracts.
- Valuing mineral assets for sales and tax purposes.
All too often, mineral managers rely on spreadsheets or “one size fits all” accounting software to track, manage and report customer portfolios. In today’s highly competitive mineral rights management space, these solutions are no longer enough to get new clients in the door and keep the ones you have.
The highly specialized requirements of non-op accounting and complexities of the mineral’s asset class demand purpose-built technology. Without the right tool for the job, your organization has likely had to create workarounds by bolting together different technologies or develop custom solutions that all too often achieve partial success. Importantly, legacy and one-off solutions cannot scale as your business scales.
If you want to ensure your team is delivering exceptional customer service for managing your clients’ assets, it’s time to pick the right digital tools for the job.
Benefits of a cloud-based, data-driven mineral management platform
A recent Accenture report noted that 90% of enterprises have made the transition to the cloud. However, only 30% reported achieving the full value they had expected. While the cloud is no longer a debatable place to host business applications and securely store data, most organizations are looking for more value, both internally and for their customers. Cloud-based software, or Software as a Service (SaaS), tailored to fit the unique complexities of non-op portfolio management and accounting deliver more value than all-purpose financial reporting and ERP, even if they are deployed in the cloud. Combined with integrated datasets and business automation, cloud-based mineral management platforms create exciting opportunities to drive operational and customer portfolio performance to new heights. The advantages are manifold.
Manage multiple portfolios
Manage dozens or even hundreds of portfolios in a multi-tenant environment that enables new accounts to be rapidly onboarded. Significantly reduce manual mineral rights management workflows to enable portfolio managers to focus on high value reporting and analysis.
Automate revenue and JIB processing
Eliminate in-house revenue processing with check data exchange integrations augmented by managed revenue services to deliver out-of-network operator statements. Reduce the potential for incorrect or missing data to base strategic and tactical portfolio decisions on the best possible information.
Scale up with a lean team
Drive operational efficiency with real-time insights and alerts that let your team monitor rig and permit activity by exception then act when needed. Take on more clients, without the need to add headcount.
Accelerate analysis and tax
Gain real-time portfolio insights, integrated income and expense tracking, audit and revenue recovery. Accelerate key workflows, like lease negotiation, acquisitions and divestitures, NRI and breakeven analysis, and income and expense reporting for tax preparation.
Seamless data set integration
Access mineral-related data sets in context with your workflows, including wells, production, land and lease documents. Plus, advanced activity analytics to identify well status change in real time, including pad clearing and frac crews moving to well sites.
Retain and attract new customers
Efficiently manage portfolios at scale, tailored to the unique mineral rights management and reporting of each customer. Enable specialty asset management teams to elevate customer experience, maximize ROI, retain customers and win new business.
The shale revolution of the past decade has led to increased leasing activity in booming and developing oil and gas regions. Land and mineral owners are increasingly leaning on banks to help manage their assets, track division orders, curate land records and ensure that they are getting paid correctly.
To succeed and cost-effectively manage a large volume of customer portfolios, your team can leverage purpose built mineral rights management technology, automated revenue delivery and evergreen datasets in one cloud-based platform. As a result, you will spend less time on low-value data curation and manual processes and more time optimizing customer portfolio performance and attracting new business.
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How do you manage your minerals rights?
Some mineral owners prefer to outsource the management of their mineral rights.
Mineral Management Services
1. Production and income verification.
2. Division orders.
3. Oil and gas lease negotiation.
4. Lease and offset activity monitoring.
What is Mineral Management?
Department of the Interior. Footnotes. The Minerals Management Service (MMS) was an agency of the United States Department of the Interior that managed the nation’s natural gas, oil and other mineral resources on the outer continental shelf (OCS).
How much should I sell my mineral rights for?
Your mineral rights could be worth $1,000/acre because there isn’t much oil left while your neighbor could be getting an offer for $10,000/acre based upon an active rig and a 25% lease. This why there is no average price per acre for mineral rights. Every owner (even in the same wells) is unique.
What is MMS in oil and gas?
Abbreviation for Minerals Management Service, a branch of the US Lands and Mineral Management Department formerly charged with supervising national resources. MMS had oversight of oil and gas leasing, royalty collection and other operations in US-owned areas.