You don’t need to be an expert to benefit from tech. Kiwi Wealth Digital Strategy Lead Ramesh Naran discusses.
Leading edge technology that makes us gasp or say “that’ll never happen!” is often about things like self-driving cars, fridges that know when you’re about to run out of milk, or drones delivering the mail. While these examples are already a reality, there are also leading-edge technologies for helping people better understand and manage their wealth.
Focusing on the customer
The big shift happening in wealth management is a relentless focus on the customer. This shift follows tech-led trends by businesses outside the financial services, such as Uber – which have revolutionised customer behaviour.
For financial service providers that have been around for years, the shift has been a big wake up call. Wealth management products and services were once for the rich, but providers have often been heavy on jargon, which we believe has made finance inaccessible and off-putting for many.
But with a renewed focus on the customer, tech is fundamentally changing what we expect and how we behave with money.
Here are 5 emerging tech trends that can help you understand and manage your wealth:
1. Virtual Reality for financial decision making
Virtual Reality has transformed the gaming industry, bringing fantasy closer to reality. But it also provides a great opportunity to bring to life and compare the implications of financial decisions. Traditionally, customers and advisers have used graphs, charts and numbers. However, VR could provide a better, clearer way to illustrate wealth-building concepts for customers. Imagine, for example, wearing VR glasses and experiencing the impact of a ‘shortfall’ in savings through an alternate reality. Based on your selected fund, you might be in the supermarket and about to grab the brands you always buy, but suddenly you’re restricted with what you can put in your trolley. Then you return ‘home’, but not in the suburb or type of house you expected. Alternatively, a different fund or product would show a different outcome.
Immersive ‘real-life’ examples can motivate people to make more educated decisions.
2. Robo Advice to answer your questions
The way financial advice is provided doesn’t always fit with today’s busy, modern and digital world. Not everyone has time to meet with an adviser, or the motivation to collate all their financial information into a form or spreadsheet. This is where robo-advice can help. Robo-advice is the use of software programmes to provide recommendations to a customer based on the information they provide, with minimal human involvement. An important feature though, is the ability to contact a real adviser throughout the robo-advice experience to answer any questions. Since last year, providers in New Zealand have been able to apply to the Financial Markets Authority (FMA) for a license to provide robo-advice. In fact, Kiwi Wealth was the first provider to be granted a license.
3. Voice activation for account information
Fire-up your device, login, navigate to the information you’re looking for... sound familiar? It’s the normal process we go through to check or do something online. But imagine bypassing all of that by simply asking your device: “What’s my account balance?” and getting the answer. The use of smart speakers is emerging as a new channel for customers. As well as booking an Uber, ordering a pizza, and getting an update on the commute to work eventually we’ll be able to listen to market updates, get account balances, and even get financial advice by simply using our voice.
- 4. Artificial Intelligence for customer service
AI is when a software programme is able to do something that normally requires the thinking and intelligence of a human such as taking in information, making sense of it and making a decision or recommendation. Using AI to help provide financial advice, and/or relevant financial education are two examples of AI in helping people grow their wealth. Providers will be able to give personalised service to lots of customers using AI where previously only humans could have. This means more people will have access to advice relevant to them.
At its heart, AI requires data. This comes with an obligation to respect and protect it for customers. Data ownership and security is a hot topic around the world. We’ve already seen tighter government regulations in some countries. We believe it won’t be long until the power is in the hands of the consumer and that they’ll be able to control who can use their data and for what purposes. This will be one to watch!
5. Digital Assistants
In the modern digital age, we’ve come to expect things to be at our finger tips instantly when it suits us. Waiting for a customer service rep to get back to you with an answer to your important question can be frustrating. Enter chat-bots. Though currently chatbots defer to a human advisor somewhere along the line, in the future it will be completely automated. Simply ask a chat-bot (that little pop up on the bottom of the screen) your question and it’ll provide you the answer or direct you to where you can find it – all with no human intervention. The aim of this is to provide answers quickly and efficiently without having to wait for someone to get back to you when the office is open.
Customer-led innovation that educates will be key
An easy to understand customer experience should underpin all innovation and progress.
The wealth management industry has struggled for decades to remove jargon and make investing concepts easy to understand. We believe this has prevented people making important money decisions and acting on them. Outside of financial services, digital-first companies have set the minimum standard that customers now expect; think how easy it is to book a ride or share your amazing holiday snaps.
Transforming financial concepts such as investment risk, compounding interest, retirement income, and goal-setting into easy to understand experiences so customers can confidently take action will be critical.