Rising NZ fintech firm, Invsta, has laid four critical growth strategies destined to shape the financial services industry over the next few years.
In its inaugural report on technology and demographic trends likely to affect the sector, Invsta says financial services businesses must adapt to the rapidly changing environment.
“Firms need to place the correct strategies in place to attract and retain the emerging generation of investors by paving the way for success in the digital road ahead,” the report says.
According to the just-published Invsta study, the industry, in particular, can benefit from four “key drivers for growth” that will propel financial services businesses forward in a “more sustainable, flexible and cost effective way”.
By using appropriate technology, financial services businesses across the board – including advisory practices, KiwiSaver schemes and investment managers – will be able to:
- Tap into wider markets as artificial intelligence (AI) and robo-advice enable firms to service ‘mass affluent’ clients;
- Improve operational efficiency through automating processes – such as client onboarding – that protect business margins;
- Develop the ‘self functionality’ tools that provide clients with more power to control and access investments; and,
- Engage more effectively with clients via the ‘hyper personalisation’ approach that modern technology allows.
While the technology trends have been bubbling for years, the Invsta study says the COVID-19 crisis has heightened the urgency for financial services businesses to develop more “agile, responsive and leaner” organisations.
For example, the report says the coronavirus disruption highlighted how a large proportion of KiwiSaver investors “don’t have access to an adviser to guide them through challenging market events such as this”.
Invsta says pressure is building to provide “higher levels of service and support” to this previously neglected cohort.
“Digital advice and greater use of intuitive information on websites, such as prompts, will not only provide service efficiencies to businesses, but will also help investors through the decision making process,” the study says. “It’s about providing the right information, support and advice at the right time so that it is relevant to the situation of the individual investor’s journey.”
The ‘Is your business ready?’ report identifies six major technology trends that will coincide with a mega-generational transfer of wealth – estimated at $68 trillion – over the next 25 years, covering: AI; hyper-personalisation; omin-channels; APIs – or application programme interface; cyber threats; and, compliance.
In a release, Rachel Strevens, Invsta founder and chief, said the report was designed to help financial services businesses “navigate and align themselves” to the new dynamic forces of change.
“With the emergence and apparent success of new fintech offerings, ongoing margin pressures, and a changing regulatory regime, business leaders are increasingly searching for new processes, systems and technology that will support their business growth objectives,” Strevens said.
Established in 2016, Invsta is an Auckland-based firm, with global representation, offering financial technology to improve both front-end services and back-office processes. Last month the firm, which counts MMC as a minority shareholder, went live with its first client, Mint Asset Management.
A free copy of the Invsta report is available here.