Digital is woven into the fabric of our everyday lives - we're reliant on it for most things, from our entertainment services to travel and banking and everything in between.
So, it's only natural that policyholders are putting the pressure on when it comes to managing their investments via digital means.
And, therefore, it's to be expected that advisers want our industry to take the digital boom seriously.
In the recently published Middle East Investment Panorama 2022, 88% of the senior financial services professionals said they saw new technology and data analysis tools as an opportunity.
Two thirds of the respondents strongly agreed clients were becoming more knowledgeable as access to information increases.
In addition, 67% strongly agreed that international life companies should focus on digital services and post-sales application processing to improve their offering to advisers.
Other areas the respondents thought life companies should focus on included:
- Online trading and switching
- Digital services, pre-sales application processing
- Technical support
Tellingly, 60% agreed that they will need to embrace digitalisation in order for their firm to stand out and grow.
If nothing else, the industry should take note of this last statistic as it points to the likely introduction of digital improvements and expansion across advisory firms.
It's clear, therefore, that the cat is out of the bag when it comes to digital.
But why has the influence of digital gathered so much momentum over the last few years and is this a uniquely good thing?
Covid-19 clearly accelerated the need for life companies to provide an accessible and flexible online solution for advisers and their clients.
For instance, the realisation of long-held plans to accept electronic signatures via DocuSign and Adobe Sign was widespread.
And Zoom and Microsoft Teams meetings (internal and external) became integral to the way we all do business. They allowed us to carry on conducting meetings and providing training face-to-face with our advisers (albeit on a screen).
But the rising use of technology can be attributed to much more than just Covid-19, with specific industry issues combining with wider economic and social pressures to create the perfect digital storm.
Pressure on margins as some advisers move away from initial commission revenue models, and the consolidation in the IFA market mean advisers need to manage growing books of business cost-effectively and efficiently. This will always encourage firms to seek ways of automating processes.
Economic pressure leads to the same end-result. Automation allows brokerages to focus on providing a strong service to a growing client base without necessarily having to increase headcount. It also means advisers can roam further when prospecting for new clients, without needing to physically travel too far from base.
What does all of this mean for product providers?
It will be vital for providers to stay ahead of or at least keep up with the changing digital landscape. To fall behind is to risk the inability to integrate systems with key advisory firms when the time comes.
Advisers and their clients will increasingly expect additional digital tools from providers and for them to be fully integrated into their processes.
It is a fact of life that the fast changing digital world is here to stay and so investment into it is always going to be money well spent.
But at least some of that money should be ring fenced to deal with associated risks, such as cybercrime.
Cybercrime is on the rise, exacerbated by an increased reliance on digital systems, along with working from home arrangements associated with the Covid-19 pandemic.
Its staggering scale and increasing complexity means that many organisations are struggling to keep up.
Companies working in financial services are particularly attractive to cyber‑criminals, given those companies tend to have high net worth clients and hold personal (including financial) data about those individuals.
Small/medium sized businesses, like many adviser firms tend to be, are often seen as vulnerable targets to criminals, who believe those companies will have less sophisticated technology and processes to detect or prevent online fraud.
The reputational and financial consequences of a successful cyber‑attack could be devastating.
RL360 has produced a guide designed to help advisers identify and prevent attacks by explaining the steps they can take to protect their business and their customers.
Download the guide here.
Overall, the message is simple: take planning for your digital future as seriously as you can afford to, while investing in robust systems to ensure you reap the benefits safely.
It could mean the difference between racing towards success or running the risk of losing relevance.
By Angela Gregory, communications executive, marketing, IFGL.