The Terminator movies played on one of the big fears people had in the 1980s and 90s – that technology would become self-aware and turn on humanity.
The reality is far more mundane. We’re not being terminated by robots, they’re just replacing us. And they don’t look like Arnold Schwarzenegger. They look like ATMs, supermarket self-checkout machines, telephone voice recognition systems – and now software-based investment advice.
We are no longer irreplaceable because of the added value we bring to the table in human nous as the world is constantly changing. If you’re an accountant, a wealth manager or a finance broker, you should be seriously considering how technology, or ‘the robots’, are going to impact on your part of the value chain.
Presumably for most of us, our part of the value chain, put simply, is ‘service and advice’.
However, can the ‘what you do’, or parts of the ‘what you do’, be undertaken more efficiently and replicated in a better way? If so, you need to rethink your place, future, value proposition and approach. Are you going to be disrupted and if so how quickly can that happen?
The implications of technology as a ‘disruptor’ for the accounting, wealth management and finance industry are well documented and simply more than theory or the efforts of well-funded product marketing teams.
Consider for a moment how in a reasonably fast and sustained way Xero Accounting Software, CommSec Online brokerage, Exchange Traded Funds (ETF’s) and Mortgage Comparison sites, have started to change the landscape and ‘wedge’ themselves between you and the client. But how far can they take it, how far will they edge into our traditional domain?
Without sounding too cynical, the IT industry is well known for promising much and often delivering far less. However, I don’t know if it’s just my increased technology awareness or a bigger reality, but it’s apparent to me that the pace of change is accelerating, and the impact of its advancement is more real, along with its success strike rate.
Advanced, thoughtful and progressive companies are using technology to make significant inroads into areas previously considered untouchable. I continue to watch the continued rise of US robo advice pioneers Wealthfront and Betterment in admiration and disbelief
As both these organisations underscore, there is a lot of capital, and it seems with an ever-increasing amount of capital and backing that they will get it right.
These groups have attracted over USD$100m in investment funding, whilst generating single digit revenues and thus far only c.USD$2.0bn in Funds Under Management (FUM) – albeit in an accelerated and scalable manner.
Reportedly the amount of venture capital flowing into the ‘Fintech’ space is accelerating, even doubling year on year. The prize on offer is too significant to be ignored!
Interestingly, all these advanced companies with technology as a core enabler seem to have one thing in common driving their advancement – greater utility, ‘a better, more fulfilling client or customer experience, undertaken more efficiently’. In fact, these companies appear ‘obsessed’ with analysing what ‘problems’ they can solve for consumers.
While it remains exciting to consider the possibilities in the Customer Relationship Management (CRM) world and how to better deliver value for clients, with worldwide players such as salesforce.com, we are closely watching the ‘customer centric’ new world of VRM (Vendor Relationship Management). Dr Catriona Wallace’s ‘Flamingo’ is well worth review if you have not as yet looked at this.
This overall ‘client or customer centric’ approach is brilliant and to be commended, it can only ultimately improve outcomes for clients and challenge us all to be better. I recently attended NextBank Sydney, hosted by Macquarie Bank – if anyone needs a stunning example of Fintech meets customer centric experience taken to the ‘next level’ – check out BNP’s diffusion brand ‘Hello bank!’. Very impressive.
The online age has and will continue to revolutionise the professional service industry ever more quickly in a more engaging manner. With increasingly better results, I cannot see how this will not be the case.
If you don’t agree with this contention, just take a look at how client-centred, technology-enabled companies have disrupted multiple industries, some previously even protected by government legislation.
Far be it for me, a technology novice, to preach about these things but just look at the logic behind all of this and how companies like Uber and Airbnb have solved utility problems and delivered a better client experience at the same time. Then look at how quickly they have done it and who they have left in their wake!
Is this change a threat or an opportunity, or both? It’s up to us to decide and develop a strategy which reflects our view of the world and how we think our clients will want to engage with us in the future.
If you’re offering a commoditised service then you’d better be doing it cheaper, faster and more conveniently than anyone else or you simply can’t compete. Worse yet, if you offer nothing more than a compliance solution, you will ultimately become obsolete. The robots will ultimately do it better!
The reality is that most of us see ourselves as offering real value, and do actually offer real value-added solutions and advice for our clients in a very personalised and engaging manner.
But to do more than simply survive and in fact thrive, we all have to make some change (and considered bets) and have one eye on both today and tomorrow and keep listening and evolving.
With the pace of change so rapid, I am not sure we can ever ‘future proof’ our businesses. A starting point however is to leverage technology to become the centre of our clients’ world, ‘wowing’ them, value-adding for them and constantly evolving to their needs. Otherwise someone else will and they’ll probably do it with lots of capital, a scalable IT system and the latest in next generation robots!
