Technological innovation in the financial services industry has been mooted as one way to increase efficiency and reduce cost. Recent announcements indicate that there is a progress and expansion of tech solutions being developed in the financial services sector, which has the potential to positively impact financial advice businesses. In further positive news for advisers, a recent survey has found “critical thinking and emotional intelligence” – a key strength of many financial advisers, will be a much sought after characteristic of advisory services in the short to medium term future.
In the wider industry, the last few days has seen the announcement of several initiatives that are hoped to streamline services and increase efficiencies in different areas. Life insurer TAL has partnered with Deloitte to deploy a regtech solution that uses artificial intelligence and voice recognition that will be able to analyse call recordings to look for matches to phrases, statements and key words that are potential indicators of risk or poor consumer outcomes. This is just one area where TAL applies AI in the life insurance process, and AI also plays a significant role in several steps of the underwriting process.
In a response to “neo-bank” start-ups, Westpac has worked with Microsoft to build a new technology platform (known as its Data Driven Experience Platform or DDEP hub), which will let it analyse all the data it has on an individual customer in real time, and offer personalised services, advice and account analytics across its banking apps.
The AFR reports that “Technology is driving change in Australia’s accounting firms as many of the profession’s traditional services are automated and accountants go in search of new ways to provide strategic value to businesses”.
Change to SOA Delivery?
Implicitly concerning advice, the much-loathed statements of advice (SoA) could be transformed by technology, particularly as ASIC last month produced a paper critical of the advice industry's current focus on disclosure. In the paper, titled Disclosure: Why it shouldn’t be a default, the regulator noted significant shortcomings of (SoAs), particularly in their ability to “manage conflicts”. The paper refutes the idea that conflicts can be managed solely through disclosure and considering that real and perceived conflicts were a key focus of the recent Royal Commission, a different, improved method for delivering advice and complying with regulations may be welcomed by ASIC.
Speaking in Professional Planner, Advice Intelligence head of partnerships Fraser Jack says the next generation of statement delivery, is set to break the mould and take a long and overdue leap into a more interactive app-driven world by putting interactive apps on clients’ digital devices that not only show the advice, but teach on it and record the outcome.
“We’ve gone from paper to PDFs,” says Jack, “but we’re now moving towards wanting to really engage the consumer and explain the information in more of a visual way, using pictures, video and sound and bringing the education piece into it.”
Given the time and effort advisers currently have to put into SoA creation, acceleration of these types of developments, accompanied with a regulatory blessing from ASIC may provide a much-needed tonic for the advice industry.
Advisers Have Key Advantage
In other positive news for advisers, a recent survey of the country’s 100 top accounting firms by the AFR found that “77 per cent of firms said “critical thinking and emotional intelligence” would be the most important skill set required by accountants in the next five years. The survey of accountants understandably recognised that more and more accountants are looking to offer advisory services to their clients. It shows that a strong and ongoing relationship with the client is one of the most important factors when it comes to delivering advice services.
This is one area where traditional advisers should be well practised, and would have a head-start over newer entrants to the advice industry.
Now if we could just get some of these technological efficiencies sorted pronto…