Financial planners who don’t start adopting tools using Application Programming Interface (API) technology will face an uphill battle to meet the demand for tailored advice, GROW Super’s Alex Naylor says.
“Advisers that aren’t adopting this kind of technology can’t be providing the same level of personal or tailored service,” Naylor says. “It won’t put older advisers who have an older client base out of business, but it’s different for advisers dealing with clients who are expecting this.”
API technology facilitates information sharing between different systems, allowing providers to use real-time data.
Naylor, the head of partnerships at IOOF-backed GROW, is the driving force behind the API-enabled GROW Professional software, which will give advisers a full view of clients’ accounts across multiple platforms and providers, including banks, lenders and super funds.
The software correlates the data and provides alerts and tracking so advisers can reach out to clients when it’s most appropriate, such as when they achieve a target, receive a cash injection or are affected by a regulatory change.
“We’re building technology that helps advisers get in front of clients at the right time,” Naylor says. “It’s all about the timing.”
Open banking
Providers such as GROW Professional are well-positioned for the government-mandated open banking system that is being phased in from July 1, 2019.
Open banking stems from the announcement in November 2017 of the Consumer Data Right (CDR), which was part of the government’s response to findings from the Productivity Commission regarding data availability and usage.
The CDR, Treasury’s website states, will give people “greatly improved access to their own data in a usable form”, and enable them to “direct its secure transfer to trusted third parties”.
Financial institutions will need to free up client information for other businesses, if the client directs them to do so. In February this year, Treasurer Scott Morrison said the move should “allow rival providers to offer competitive deals, products that are tailored to individual needs, and enhanced services that simplify the choices customers face when accessing banking services”.
The open banking system will be rolled out in stages. Treasury states: “The four major banks will make data available on credit and debit card, deposit and transaction accounts by 1 July 2019 and mortgages by 1 February 2020.” Consumer data “on all products recommended by the review” will then be made available by July 1, 2020.
API-enabled technology, Naylor says, will enhance the open banking system immeasurably. Instead of advisers accessing their clients’ accounts individually, the software collates client accounts and employs algorithms across the data. For advisers, this means not only real-time data, but a much richer and more granular view of their clients’ financial lives.
Naylor uses the example of an adviser who might have an opportunity that applies to a defined set of clients with a certain amount of disposable cash – a group that could be searched for using the product’s aggregation tools.
Big brand backing
GROW Professional was developed by GROW Super in partnership with fintech start-up Basiq, which facilitates the technology behind the platform and handles encryption.
Naylor says the decision to form a relationship with Basiq was based on a few factors, including some heavyweight endorsement.
“We found out that NAB and Westpac had backed them and allowed the framework to exist,” Naylor says. “Basiq are also Australian based, which was important. And everyone we spoke to about [chief executive] Damir Cuca loves him and says great things.”
GROW Super itself has some significant backing, as IOOF purchased a minority stake in the company earlier this year. Naylor reports that while GROW Professional will be available to the public this August, it’s in the pilot phase and being trialled by several IOOF advisers.
“Given our relationship with IOOF, we’ve got a lot of feedback around what technology solutions and features advisers want,” he says.
Out of the shadows
Naylor himself is an ex-adviser, and firmly believes API-enabled technology will help advisers monitor their clients and look after their best interests in a better way.
“I believe 99 per cent of advisers are great at their job, and there are very few that are tarnishing the reputation,” he explains. “If advisers are using this technology –ours or another provider’s – it really pulls them out of the shadows. An adviser can’t pretend they didn’t know the client’s situation if they’re using it.”
Naylor uses a modern comparison to illustrate how clients – especially younger ones – are increasingly expecting a more unique, tailored experience from their chosen providers.
“Facebook, Instagram, Netflix, Spotify… if we compare our experiences on any of those – say yours versus mine – they’d be completely different. That’s because they’re tailored. If we expect that from basic service providers, then we naturally begin to expect that from our bank, our mortgage provider or our financial adviser,” he says. “I just think it’s a no-brainer.”
