Ian Dunbar, CEO of NZ-originated fintech pioneer, SuiteBox, analyses the technology trends set to make a difference in the year ahead for financial services
Kicking off 2017 on a positive note, I’ve examined the way in which technology is impacting the way we do business in the financial services sector. The wealth landscape is changing quickly as new technologies are developed and introduced into the market. Not all technologies will take off, but some definitely will, making life more productive for your financial services business.
An example is the arrival of robo-advice. There is no doubt that robo-advice is a significant technology play from the regulator’s perspective, and we should be aware of this, but other trends as well which we’ve summarised below. Keep watching for more commentary and news on this critical aspect of development in the NZ financial services industry.
- The rise and rise of data aggregation
Not heard of Yodlee, e-Wise, Class or Investment Link? I suggest you check them out. These data aggregation tools are the engine rooms of the future as they provide access to vast quantities of relevant client data.
In the case of Yodlee and e-Wise, they also enable data to be ‘scraped’ from your clients’ accounts if they provide access to their usernames and passwords.
The real power of data aggregation is the value of the data and the actionable insights it provides. Yodlee was purchased by Envestnet, a US financial planning software provider for US$610m, reflecting the value of data aggregation in the future of financial planning.
- The advents of APIs and the cloud marketplace
The rise of the Application Programming Interface (API) is fundamental to the future. APIs are the ‘plug and the cable’ of new technology that allow different systems to talk with each other and pass data back and forth.
Historically, technology was often ‘heavy’ and vertically-integrated, with one application performing lots of functions. Now, fintech innovation is driving the growth of specialist tools and the significance of the API is that it allows seamless integration between specialist systems, with the help of the cloud.
Xero, the cloud-based accounting software provider, is a master of this type of business. In the ‘add-on-app marketplace’ there are more than 500 tightly-integrated solutions, using the core accounting data from Xero and talking through APIs.
For example, if you want to better manage debtors, there are 13 specialist add-on-apps to choose from which allow you to customise your online accounting solution.
For financial advisers, the leading US provider of financial planning technology, MoneyGuidePro, has 47 integrated partners already in place, delivering everything from financial strategies, ‘what-if’ analysis, portfolio management, robo-advice, profiling, insurance comparisons, virtual meetings, statement of advice production, cashflow analysis, budgeting and more.
- Robo is not going anywhere
Expect the rise of the robo-adviser to continue. The marketplace in several market places is becoming crowded and not everyone will survive, but if the US experience is any guide, we will see the big wealth providers and broking businesses in New Zealand buy or build their way into the space. Look out for robo-advisers pushing their way into the high net wealth space too with more sophisticated product offerings, as well as pension provider.
- Video killed the…
Global fintech marketing and events company Finovate has named the ‘virtual meeting rooms’ one of the leading wealth technology trends for 2017.
Why is this? Simply because video-based engagement can deliver significant business benefits and an enhanced client experience.
Take, for example Nationwide, the world’s largest building society, that boasts a relationship with one in four households in the UK via its 700 branches and 400 mortgage specialists. After the implementation of a video consulting service, Nationwide measured customer experience, new business uplift and cost and found that 93 per cent of customers who had experienced a video meeting said it was an excellent replacement for a face-to-face consultation.
- Artificial Intelligence is on its way
The application of artificial intelligence (AI) to financial services is becoming mainstream. Smart machines and technology can turn data into customer insights and enhance service provisions, bringing the digital experience closer to human interactions.
US start-up Clinc, coming out of the University of Michigan, is using deep-learning technologies to deliver AI tools that will enable consumers to interact with their banking and financial services providers using natural language interaction.
Spanish Bank, Santander, is using voice recognition via its banking app. Sweden’s Swedbank ‘Nina’ assistant is dealing with 30,000 conversations per month, achieving a 78 per cent first resolution rate.
At SuiteBox we are already experimenting with the application of AI to meetings. Converting video content to text will allow us to offer analysis tools around meeting content. Application of facial recognition analysis will expand this into the analysis of facial movement in meetings.
Ian Dunbar spent 15 years in the UK, HK and Australia with global banks, most-recently running the UBS investment platform business in Australia. He is now CEO of SuiteBox, which transforms customer engagement with intuitive video, document collaboration, selective recording and real-time digital signing.