Technology: Helping the affordability and accessibility of financial advice

The role of technology

Increasingly technology is playing a key role in the provision, management and monitoring of financial advice. As the advice landscape continually evolves, the unprepared institution may experience increased operational bottlenecks and inefficiencies based to a large extent on the degree of manual processing, data management and reliance on the expertise of individuals for first line advice monitoring and supervision; this can further increase processing costs, extend cycle times and place additional demands on existing resources.

This type of environment makes it challenging to scale sustainable growth while winning the hearts and minds of customers. With customer experience, cost efficiency, risk management, conduct and regulatory compliance front of mind, common questions continue to be raised in the Board room including:

  • Are we providing our advisers with the right tools, training, and enabling technologies to allow them to maximise value adding time with clients?
  • Are we helping our financial advisers to deliver exceptional customer experiences, while managing a cost-effective advice function?
  • What confidence do we have in our adviser monitoring activities?
  • Do we have the appropriate controls and governance mechanisms in place, to safeguard our organisation, customers and advisers from potential breaches of mandatory legal, ethical and regulatory requirements?

The value of technology

We see a role for technology to continually improve the customer experience, meet compliance requirements, deliver cost savings and drive efficiencies across the advice function; activities that can help solidify confidence and trust in the financial services sector.

The market for advice technologies is rapidly evolving and continues to emerge at pace. Modern, nimble cloud- based technologies are being leveraged to provide greater transparency into the advice process and improved visibility into business performance. Various forms of automation such as Artificial Intelligence (AI), Machine Learning (ML) and Natural Language Processing (NLP) are being used to help reduce the human burden across various advice tasks, delivering efficiency gains and associated cost-savings. Sophisticated advice technology ecosystems are being built to strengthen customer interactions, develop deep customer insight and deliver seamless experiences across multiple channels.

Advice businesses are seeking to harness the following business capabilities and associated benefits via technology investment. This includes the use of digital labour, call analytics, recording and monitoring, document and data management, connected cloud-based ecosystems, sophisticated identity and access management and learning platforms.

Looking forward

The market for financial advice technology continues to look promising. Although no single technology solution will serve as a panacea to the range of differentiated requirements for advisers, licensees, and the clients they serve, there is an opportunity to continually leverage technology to provide, manage and monitor financial advice, while enhancing the customer experience.

Technology can deliver an array of benefits dependent on the individual use case, with a key driver being the ability to deliver cost savings and efficiencies. The reality is the provision of financial advice is complicated and only made more so by the highly personal nature of the service itself. We have seen some organisations grapple with a raft of fragmented, legacy technologies and the path to move forward in the face of immense scrutiny – and in an emerging technology market – may seem daunting.

The decision point on how organisations are to respond to the changing technology landscape is not a question of if this needs to happen, but of when and how. The catalyst to move the dial on the current state, and take the reins on driving organisational change, will reward those institutions that recognise this burning need sooner, rather than later.

There are several options advice organisations can take:

  • Adopt a ‘wait and see’ approach: observe how the market continues to evolve and mature and become a ‘fast follower’ once technology aligns with organisational risk appetite.
  • Partner with a vendor: drive innovation through new configured products and experiences.
  • Incrementally build an ecosystem of technology components: leveraging multiple best of breed vendors.

In an environment of increased attention from regulatory bodies, media and the public, the plethora of changes will persist. Customer experience and compliance will remain front of mind for years to come. Those organisations that pre-empt, rather than react to change, are likely to win the market through the hearts, minds and wallets of their customers.

The technology strategy and associated roadmap to get there will require focus, attention and facing into changes along the way, but there is a significant reward for those organisations that can deliver a sophisticated technology ecosystem.

We are seeing providers seeking to harness a broad range of technology capabilities to drive enhanced customer experience, back-office efficiencies and compliance. More could be done.

KPMG welcomes the opportunity to be part of the discussion on reforms which seek to make advice more affordable and accessible to more Australians.

We urge you to read our report.

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