The financial services operating landscape is changing. Greater consumer expectations, greater risks and greater opportunities will ensure 2022 is the year technology will become more ever more vital for advice firms, providers and platforms.
Anthony Rafferty(pictured), CEO of Origo, comments:
I see five interconnected reasons why technology will play more of a role in the financial advice market in the year ahead, as we move from reacting to the impact of the pandemic and the uncertainties of the past two years, to the new automated and digitised landscape laid out ahead of us.
There is no doubt that almost two years of pandemic has accelerated changes in the financial services industry. We have seen providers and advice firms adapt to what has been thrown at them and in the main, to have done it well.
Now, with a customer base which has service expectations driven by the retail sector and which is far more comfortable and confident using digital services, I expect the industry will pick up the pace in automating and adopting digital-first solutions, which will mean also a greater focus on the efficiencies of its processes and back-office operations.
Here is how I see the new landscape linking together.
- The rise of digital.There is no doubt that digitisation is going to have an increasing impact on the financial services market in 2022. More tech-savvy consumers and the development of technology-driven hybrid advice services, for example, mean industry participants across the board – product providers, platforms and adviser firms – will be looking at how they are interacting with their clients, and how they can improve their operations to benefit their businesses going forward. How to connect better, bring in data faster, ensure the security of customer information, and improve the efficiencies of their client service, will be among the questions asked.
- Permanent hybrid working.Enforced home working during the pandemic has meant many workers and companies have realised the opportunities presented by more flexible working arrangements and are looking to retain some degree of workplace flexibility in their operations. This requires implementation of appropriately adapted and secure operations and procedures. But firms working with inefficient systems, where duplication of data and manual processing is part of the everyday workstream, will suffer. The more efficient a company’s processes are the greater the benefit of working hybrid.
- Increasing business efficiencies.In our ever more digital environment, where consumers expect instant access and next day delivery, the extent of the manual processing that still takes place in our industry is shocking. The Letter of Authority process is a case in point, and one Origo has highlighted, with advisers having to manually fill in forms and have them signed by the client and then emailing, or in some cases faxing them, to providers. Whilst, understandably, tackling operational inefficiencies has not been high on the agenda for many financial services firms during the pandemic, this is now beginning to receive renewed focus amongst providers, who are seeing simplification, digitisation and acceleration of processes as the means to reduce costs and create operational differentiation in the market.
- Greater connectivity. One of the bugbears of our industry is that systems and software needed to run financial advice businesses do not talk to one another and so force the re-keying or manual transfer of data and information between them. Not only does this increase risk to businesses but it makes for inefficient, overly time consuming and so costly operations. This issue needs product providers, platforms, software houses and adviser firms to connect with one another easily and with ‘done once and dusted’ integration.
- Online security.Last but far from least, this subject has become a top priority for financial services companies in 2021 as ever greater online working (and consuming) has led to a significant increase in cybercrime. As an industry we are handling huge amounts of personal and confidential information about individuals, which if it falls into the hands of criminals can be used to conduct scams or to steal identities. This can lead to devastating consequences for the individuals involved as well as fines and reputational damage for companies. As an industry, our customers expect us to keep their information safe. All companies and especially those operating flexible working practices, are going to have to become more cybercrime aware, employing the latest systems and solutions, such as dual-factor-authenticated encrypted email, to ensure we meet that expectation and to reduce business risk.
How we work, where we work, the systems and processes we use, and the challenges we face, are continuing to change as we work our way through and out of the pandemic, presenting both opportunities and challenges. Technology will help the financial advice market and financial services in general take leaps and bounds forward to improve its operations, costs and security and deliver better service to end consumers as a result.