Digitisation has dramatically changed the way society operates. While we are far away from living in a virtual only society, it has changed the way we communicate and has made the world, generally, a more accessible and inclusive place. Digitisation has also increased the focus and expectation on access to timely information and the lowering of transaction costs for goods and services. It therefore won’t surprise many, that the latest World Bank ‘Digital Progress and Trends Report’ points out that the IT services sector was the most vibrant and fastest-growing segment of the global economy over the past two decades, outstripping the global economy on both ‘value added’ and ‘employment growth’. The rapid emergence and development of AI is both scary and exciting as it further transforms the way we utilise technology.
SMEs represent 97% of Australian businesses, a perceived entrepreneurial environment and yet, in the face of this technological revolution, Australia only ranks 22nd in the world for innovation (OCED). Australia’s Department of Industry, Science, Energy and Resources fears we are falling further behind the world. With the Australian financial advice sector predominantly represented in this business segment, it does present a worrying state of affairs.
As an industry we are challenged by the dramatic growth of technological expectations and solutions, changing demands of clients and demographics and all the while we face continued legislative and financial pressures and ongoing uncertainty. It is no wonder that maybe we are caught in the proverbial headlights, however, can the advice industry accept a slow adoption rate when other industry segments are storming ahead, such as the banking sector. The take up of digitisation by the banking sector is dramatic, which has effectively capitalised on the use of data and AI to not only improve efficiencies but also provide an enhanced client engagement model to its clients.
In the financial planning sector, many still argue that clients won’t embrace technology, particularly older clients, but truthfully that is only the fact in rare cases. The fact is clients won’t embrace technology that causes friction, is unclear and confusing, or when there are no clear benefits for adoption. That isn’t really an age argument and can be a deterrent for any demographic, but for older clients it is often easier to sign a form because that’s what they have been used to, regardless of the benefits of a digital alternative. However, the banking sector is demonstrating that when it is an industry adoption requirement, clients will come on the journey.
We cannot forget however, that behind the veneer of technology still sit human beings, hoping and driving for better engagement and outcomes, either social or commercial, as easily as possible.
The financial planning sector has, of course, not ignored technology. The Fintech sector continues to add value as we see all stages of the business and advice value chain supported by new solutions. Business owners are embracing the sector, sometimes too much and often not enough. As far back as the 2000s, investment platforms were the cornerstone of the Practice Management movement, their popularity growing as their impact on business efficiency was tracked and reported. Todays platforms continue that journey, vying for the recognition of offering more and more technology efficiencies, solutions, and connectivity. The advice industry is importantly challenging itself as to how it can digitalise advice to allow advisers to remain profitable, make advice more affordable and to reduce the risk of manual processes.
There is an important question to answer with all this technology at our fingertips. How do you choose what to implement and how? By not asking the question, the risk is that all that occurs is the digitisation of old processes and no real innovation being introduced; just the same, out-dated, processes being given more longevity.
The solution is to start with your business philosophy and to embrace a digital-first culture and model. The focus being to offer more value and exceed client expectations.
Being digital-first is a mindset, across the whole business, and is not about being an actual technology business or requiring a dedicated technology team. It is an assumption that there is and will be a technological solution to your process, dilemma, or client engagement proposition and therefore allows you to focus purely on your business strategy; with the confidence the ‘how!’ is close by.
A significant observation about digital first businesses, is that they are not reactive to what tech is available or hindered by tech leading the business decisions. Rather, the business can be built around a roadmap to achieve your vision, with technology as the enabler and not the determinant. Importantly a digital-first culture also hinges on employee empowerment, encouraging and rewarding curiosity and problem solving, which ultimately results in innovation and better client outcomes.
Remembering that behind the veneer of technology still sit human beings, successful digital-first businesses understand their clients, their problems or needs, and then find newer, quicker, more efficient, and cost-effective ways to deliver on them. McKinsey states that digital-first businesses tend to achieve greater productivity and growth and have a 30% uplift in customer satisfaction. Importantly for your most important asset, they also have a 20% uplift in employee satisfaction.
How do you achieve a digital-first business?
Business Vision
Have a clear and documented business vision, that articulates who your customer is and the problem you are solving or solution you are providing. Do not be constrained by the 'how'.
Employee Engagement
Build an open and non-hierarchal business model, that facilitates and encourages new ideas and ways of delivering your client outcomes. Do not leave solutions solely to the product team or key individuals. Build a business that embraces the digital first methodology.
Be curious about data
Source and be curious about data, both qualitative and quantitative. Understand your business, its data points and implications and use it to deliver better outcomes. Research, review and refine using data.
Client First
The cornerstone of your business is your client, make them the cornerstone of why you do things the way you do and not just because it benefits your business. Start with the client, it will always benefit your business. Start with your business and it may not benefit the client.
Team Development
Digital change and transformation allow inquisitive people to grow and become more valuable to your business. Cultivate and encourage knowledge growth, celebrate learning and success and turn failures into learning.
