In the financial advice world, firms that are embracing digital transformation in advice and guidance will be the winners.
The same is especially true for financial advice, yet its ability to diversify and fulfil such requirements has been stifled mainly due to a historic reliance on traditional and manual processes.
For any business seeking to modernise and thrive, processes are key, and automation is integral to saving time and focusing the team's efforts on areas such as nurturing clients. Take customer service for example - a business with an extensive FAQ section built around a decision tree which helps the customer come up with their own resolution (I'm looking at you Sky), reduces 90% of customer calls so that the helpline can deal with customers with more complex issues.
In the financial advice world, firms that are embracing digital transformation of their advice and guidance will be the winners. By automating key parts of the advice process, technology can help advisers free up their time to spend on more client-facing activities. Technology can also help clients self-serve digitally for the more simple processes, without the need for human adviser interaction, thus minimising cost to serve for particular customer groups.
This results in a better experience for the customer, with more quality time spent with the adviser, who in turn is also able to speed up their advice process, thanks to being supported by the right technology. Customers can also access simplified digital advice instantly, get a swift on-screen advice recommendation, and recognise value straight away.
Digitising financial advice can in addition enable business-wide control by ensuring that advice recommendations are explainable, consistent and that they fulfil any risk mitigation and compliance requirements.
In an area where FCA rules are strict (quite rightly so), the provider needs the reassurance that this life-changing advice being offered to a client is reliable and will give them the best outcome for their needs and objectives. In automated technology, it is the consistency of the algorithms and the configuration which gives this reassurance.
For any provider embracing digital financial advice, their automated systems must be able to produce consistent advice outcomes and because of this need, such processes are tested rigorously before being used with ‘real’ clients.
Digitisation lends itself well to providing a personalised service which appreciates the needs and wants of an individual. For example, with the increase of ESG preferences, a digital journey can be configured to deal with a client’s specific preferences.
Another important part of the financial advice process is the need to show a client the consequences of their decisions. If they would like to contribute minimal salary into a pension every month, how will that affect their retirement lifestyle? The capability to model scenarios within an advised framework helps the client quickly see the effects of certain decisions on their future finances. Digital tools can help to do this seamlessly, without the need for complicated calculations, and with the added extra benefit of being able to show engaging visualisations instantly on-screen.
Digital advice can also help to cater for clients who are vulnerable or who have complex needs. By starting the journey digitally, the individual can be passed on to a financial adviser through a 'trap door' mechanism if certain alerts are highlighted. This way, the customer gets a blended service which is personalised to their specific needs.
Over time, we expect automated advice to deal with increasingly complex advice cases. Harnessing artificial intelligence, intelligent automation and machine learning will improve the quality and personalisation of the client experience.
Every advantage that digital financial advice brings, aims to have a direct impact on improving the customer's experience, whether that is saving time, being more personalised to their specific needs and objectives or the assurance of more robust advice. The true beneficiary here will always be the customer, as financial advice firms continue to innovate and embrace digital transformation.
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