It conjures up images of dystopian landscapes, space travel and flying cars but 2020 isn’t the far off future previously painted by comic books and sci-fi films. The reality is 2020 will be here before we know it.
Unless you have plans to sell up and retire to the Bahamas, you need to start thinking now about what’s going to set up your financial services business for future success. And it looks like an exciting future to be part of.
The financial services model of the future
Significant opportunities lie ahead in the coming year as the big technology trends - artificial intelligence, machine learning, and the cloud - become more embedded within financial services (more about those in our 2019 technology predictions blog).
It opens the door to a future financial services business that’s more efficient, more automated, and infinitely more capable of doing two critical things:
- Delivering quality advice in a way clients want; and
- Doing it in a way that delivers profit and is growing.
The successful model of the future will be about profitably servicing both high-touch clients and those with low-touch needs while delivering heightened service experiences at acceptable margin.
Automation will make that scale possible, while human expertise is applied to service more comprehensive advice needs.
The future adviser remains a valuable asset to businesses. But, smarter with their time and heavily supported by technology, they can better predict which clients are worth spending time on and when it’s best left to the artificial voice assistant.
Servicing unadvised opportunities
The future lies in servicing more unadvised opportunities and satisfying client transactional and strategic needs - today some of those opportunities are turned away. Automation means savvy financial businesses will not only better service existing clients but tap into that market and a wider range of new clients. Those clients will expect to do some - even all - things themselves.
Artificial intelligence will take care of the grunt work enabling human productivity and revenue generating activity to be maximised. AI chatbots will improve essential processes like data capture and enable services to be provided at any time of day or night.
A single source of truth
The days of using different systems and solutions for different parts should be long gone (there are too many compliance and suitability issues to handle).
The financial services businesses that are to be most successful will be built on one consistent technology platform that provides a single source of truth. With everything in one end-to-end, fully integrated system, the client experience and data opportunities are fully optimised.
And while the future financial services business won’t be short of regulatory challenges, high quality data coupled with real-time compliance monitoring and insight, will mean those demands become less onerous for them to manage.
The opportunities for growth and profitability of the future financial services business will be almost limitless. We can see further automation in how they streamline their processes and focus on high value activities. Systems will learn and they’ll predict which clients will be valuable (and those that won’t).
Business before technology
The financial firm of the future will be centered on technology to efficiently service high touch clients and deliver service to a larger lower-touch client base at scale. Unless businesses become more automated, through quality data and integration, this will be difficult for many, and success in this area will heavily determine winners and losers even as soon as 2020.
But this isn’t just about technology. The secret to a successful roadmap for the future is knowing what outcomes you want. It will take real vision and a clear idea of what good looks like.Too many businesses focus on the tools first and only risk getting distracted.
So, put tech to one side and focus on your business strategy. Those that want to be match ready for 2020 will be prioritising business strategy now and have a clear vision of the outcomes they want to achieve before looking to the technology they need to get them there.
Want to be match ready for 2020? Here are 4 things to focus on now:
- Segmentation - make it clear what you will offer and to whom.
The challenge is to address high touch and low touch - at the same profit margin. Until you’ve done this don’t talk technology, it’ll only distract you. - Automation - Aim to make your business as efficient as possible.
The ability to focus on key clients is to not spend time on others. Automation will make that possible. Decide what you want to automate and what you need your people to do. - Data strategy - Make data quality a priority this year.Data will give you the insight you need for segmentation and is also a necessary ingredient for automation (more on that in my blog Breaking Bad Data).
- People - Don’t underestimate this one!
People change as part of technology change is probably the biggest stumbling block for achieving automation of process efficiency. Remove the reasons ‘why not’.
