Given that financial services revolves around trading information and counting money, digital technology would seem like a natural fit. Yet many of our larger financial institutions are not taking advantage of the accounting and communications edge that the rapidly evolving digital world is providing.
It is ironic to see an industry driven by time and money being the laggard in adapting technologies delivering real-time accounting and market analysis capabilities. The current financial technology (fintech) boom is striking for the absence of offerings coming from established financial institutions. Perhaps that is no surprise. The focus of large institutions is boosting numbers for their products – the bigger the numbers, the lower the operating costs.
Domestically, the superannuation industry is a prime example of a slow-moving industry unable to adapt fast enough to the wave of financial and social media technologies. At a time when customers are demanding more transparency and control, the technology already exists to deliver this in real time. Yet the industry is failing to capture this opportunity.
It is little wonder that the large superannuation funds are losing customers (and trust), and self-managed super funds (SMSFs) have become the fastest-growing section of the super industry. The lack of flexibility of the large institutions is almost an inducement for their members to leave.
The SMSF growth is revealing of greater trends in the investment world, which is being driven by investors wanting greater control – access and clarity – over their own finances.
At a time where even those most technologically-challenged are having to upgrade their phones and their laptops every few years, there is an ever-increasing demand to find ways to access data, whether it be news, music or financial accounts.
And when you factor in how the rapidly evolving digital revolution (with a big shove from Facebook) is creating a greater demand for transparency – as well as accessibility in real time – it is obvious why consumer habits are changing across all industries.
The key lesson we have learned
For years now, we have been building platforms for financial planners and institutions to access and manage their clients’ accounts. Our client base defines our technology. The key lesson that we have learned is to align our software to what the consumer wants. And each consumer has different wants, which often change depending on the circumstances.
The traditional software model is broken, because most consumers can no longer bring themselves to pay vendors the same price for software in a world of free apps and $2 downloads for serious, high-quality and heavy-duty commercial apps. This is on top of free software services where the vendors receive revenue from adjoining or bundled/packaged/complementary/products.
Technology needs to replicate the environment of the SMFS, and be able to offer customised products that you would expect in any current retail environment.
So the market’s demand for lower administrative costs means that there are opportunities for an open platform that can provide investors immediate access, and with greater transparency at a competitive price.
In the new model, the client doesn’t have to embrace the software; they are not locked in to a particular platform, a tablet or format. Instead, as with subscription services such as Spotify, they have the freedom to drop in and choose the services and products that suit when they want.
The new technological model needs to be able to adapt to whatever changes – legislative, tax, income stream, fees – might be imposed on any of our clients’ accounts, and provide the appropriate response, in real time – faster if possible – for a customer base that includes both retail and institutional investors, whether they be trustees, banks or institutional funds.
A lot easier for consumers
Managing SMSFs is often made out to be a complex business, but the new-generation administrative technology is making it a lot easier for consumers. While administrative costs are coming down, and consumer power increases with expectations of access and transparency, the only way our technology can keep our clients – trustees, investors and financial planners – competitive is by being flexible. You have to be able to accommodate what the client wants; provide them with the service that suits them best.
As the rapid evolution in technology constantly shifts consumer expectations, it is essential that the technological platforms and products we bring to that marketplace are able to adjust new demands, in real time.
The key is to provide technology and products that enable or empower the client to compete, to issue new products, to change, to reengineer their brand, to provide bespoke offerings. We are striving to offer this to clients to facilitate their needs, rather than block their capability by making them adjust to the constraints of our system.
