In 2015, TechCrunch ran an article covering the technology we won’t be using in five years time. TV remote controls, credit cards, USBs, even the humble pencil was up for the chop.
It’s not 2020 yet (and the pencil looks like it might survive) but the drive for a better way to do things, and the constant evolution of technology, continues to push any sense of complacency out the door.
Change is inevitable, but it’s not always a comfortable ride.
We regularly remind the team at Iress that the companies that will be around in the future won’t be those that are the largest today. They’ll be the ones that can adapt the fastest. Even then, adapting to change will merely be the ticket to the game.
The financial services industry is no different. Our clients universally and rightly demand more. More efficiency, more scale, faster processing, more data. Everyone’s looking for a competitive edge, and a way to improve their performance. We are up for the challenge, but here’s a warning: be prepared.
What brings about real change?
Experience tells us many businesses underestimate the investment required - in culture, people, systems and technology - to bring about real change.
The good news is that getting it right can be truly transformational. The changing shape of the private wealth management industry in the UK is proof.
The industry has countered shifts in consumer behaviour, emerging technologies, increased compliance obligations, movements in the regulatory environment and new execution venues. It’s now moving from a segmented broking and financial advice model to a full service wealth management industry. Technology has helped simplify operations and cost and created the space to think more broadly about revenue and how to give clients what they really want.
Experience tells us many businesses underestimate the investment required - in culture, people, systems and technology - to bring about real change.
Yesterday’s brokers now take a more holistic view about the best way their businesses can solve client needs. Many operate as full service wealth managers, offering financial planning, estate planning, model portfolios, tax advisory and reporting, insurance and multi-asset classes.
Change is helping this industry move forward, creating more opportunities to increase trust, diversify and secure future revenue growth.
Our UK experience is proving invaluable to our clients outside the UK where the opportunity exists to chart a similar path. It’s an enormous opportunity for any business willing to take on the challenge.
Transformation is never about technology
Putting that specific industry to one side, transformation is never just about technology. When clients come to us for help with their digital transformation strategy, they are sometimes surprised when we don’t start with a conversation about our software.
Successful digital transformations do not start with technology. They start with data.
The problem is that in a world that will generate an estimated 1.7MB of data every second for every person by 2020, good data is still relatively hard to find.
We often ask clients how confident they are about what is happening in their business. Many say they have processes and people in place, but despite enormous volumes of data they can’t be hand-on-heart completely sure.
The data advantage
Regulation has helped the financial services industry be very good at data protection and compliance (the things that must be done). But the opportunity to use data for business efficiency and a competitive edge - the data advantage - is still missing.
The data advantage means being better informed for reporting, for insight, for automation, and for intelligence. In our view, it is the crucial part of a successful transformation strategy.
Businesses like Amazon, Google and Facebook have a distinct data advantage because they have the volume of data that machines require to identify trends and learn. It’s interesting to ponder what Amazon would do if it were an advice business.
The opportunity to use data for business efficiency and a competitive edge - the data advantage - is still missing.
We have started this process, thinking about the best way to help advisers use data to deliver advice at scale. After a successful launch in Australia, this year we introduced Xplan Prime to the UK market. Xplan Prime uses data and technology to help financial advisers deliver more advice at scale to more people.
It’s not a replacement for financial advisers, it’s a data advantage.
As a technology business, it’s our job to move financial services businesses along the technology curve and help them embrace change. Sometimes it’s a nudge, sometimes it’s a more uncomfortable push. We do it because we recognise that change is the key to transformation.
Don’t fear change, fear the absence of it.
