By Paul Yates, Development Director, Selectapension
Disruptive technology is the buzz word in getting consumers to change their purchasing behaviour and we are seeing other sectors leading the charge in creating software to garner customer attention. There are signs of innovation within the financial services industry with the development of Pingit and other money transfer apps, so what can Advisers do to harness this opportunity?
We are living in a world where many people expect access to the internet 24-7 and are therefore expected to be active online whilst taking part in other activities. Just by tuning in to Saturday night TV, an audience is not only asked to watch the programme, but to tweet along too. Therefore retailers, such as Sainsbury’s, are working on online apps which customers can engage with whilst they are doing their shopping. For example, if someone is loitering in the bread aisle, a supermarket could take the opportunity to alert their customer that peanut butter is on offer. Spotify too has transformed how consumers buy music and it’s only too telling that this year’s HMV adverts are aimed at selling headphones, instead of traditional CDs because so many people now only access their favourite songs from a cloud.
We are also seeing signs of this technology impacting personal finance sales and marketing. Contactless debit and credit cards are becoming a typical part of the process of buying goods, rather than just a novelty. In addition, travel insurers are potentially partnering with airports to offer deals and discounts. Using a person’s GPS system via their Smartphone means that when a person enters an airport they would immediately receive a text or alert from a travel company to check that they have the right insurance before they board a plane.
Developments in digital technology will certainly change customer behaviour and their expectations of companies. As consumers increasingly have access to technology, the momentum will quicken and soon clients will expect the same level of innovation from their Advisers.
If we looked at targeting consumers in the 5-10 year “corridor” before retirement, we could create nudges to encourage better, more-informed saving habits. For example, when a person receives a significant pay-rise age 50, this could be the opportunity for technology to alert this person to suggest saving their extra income into a pension. With so much consumer inertia when it comes to long-term savings, a disruptive alert could be the tool to encourage people to start thinking about life after work.
This could also be a key opportunity for Advisers to engage with their clients at an earlier point in their lives. With a backdrop of free guidance from the Government, we need to add value to people’s financial planning. What better way than interrupting their current savings habits with ‘savings suggestions’ as a way to engage people with the need to start face to face financial planning conversations? I can imagine that a person receiving an alert from an Advisory firm during their 50th year, may encourage them to start seeking financial help.
Technological innovation is nothing to fear. As an industry that has gone through so much change in the past 18 months, we should be ready to use technology to our advantage – and our customer’s advantage. Because surely if technology can disrupt someone’s daily, busy lives, it may actually get them saving?
