There are a couple of things I strongly believe in when it comes to the future of financial planning.
- I believe the digital revolution is going to change how our clients want to experience our service
- I believe that financial planners who have developed their right brain potential are going to be highly successful
- I believe that current business models are going to perish by disruptive change
To unlock the next wave of growth, companies must embed innovations in disruptive new business models ~ Clayton Christensen
In this highly recommended article Bree McDonough explains why our financial planning business needs to re-engineer its business around the connected customer. McDonough explains that the digital revolution is imposing disruptive changes to the Australian wealth management and financial planning services. Driven by advances in technology, the connected economy brings a power shift to customers and changes in competition.
The paper explores the key strategic enablers to increase digital intelligence and re-engineer services around today and tomorrow’s clients. According to McDonough these technology driven enablers are:
1. Know your customer better than they know themselves
Donough explains that clients expect that businesses use their digital identity data. The industry needs to take advantage of this and implement the capability to generate actionable insights with “Big Data”. Understanding this data and predicting patterns can improve existing business models and create entirely new revenue streams from identified opportunities.
2. Redefine service and value
The industry must embrace digital technology to connect with todays and tomorrows customers. The future customer experience will be highly collaborative, offering life like interactions with financial planners and specialists through holography, interactive financial planning applications, rapid account/policy opening and management and secure exchanges through biometric electric signatures.
3. Future proof and remove barriers
Companies that develop a coherent plan for digitilisation will give themselves a head start on capitalising on stronger client relationships, reduced operating costs, improve workflows, enhance risk management and regulatory compliance capabilities. To support changing customer expectations and industry regulation, implementing a digitisation strategy is an ongoing program of work.
McDonough’s conclusion is that the traditional business model in our business is not sustainable to service today and tomorrows connected customers. The industry is urged to invest in building their digital intelligence and implementing a connect customer centric business model. By implementing the 3 strategic enablers, the industry can leverage the digital revolution to build sustainable and valuable relationships, build trust and a deeper customer understanding.
Successful businesses will counter disruption by constantly evaluating their business model and position themselves with a strategic advantage.
Too much data leads to not enough belief
Although the paper of Bree McDonough can be an eyeopener for many financial planning organizations, I believe it’s missing something crucial.
Business plans with too much detail, books with too much proof, politicians with too much granularity… it seems as though more data is a good thing, because data proves the case.
The data shows, for example, that texting while driving is more dangerous than driving drunk. It doesn’t feel that way, of course, but will you respect the data and stop, cold turkey?
It took Galileo decades to persuade people the light objects fell as fast as heavy ones… even though he was busy dropping them off buildings for all to see. I wonder how long it will take us to get our arms around this avalanche of insight. Probably longer than most of us think, and businesses that use it too much because they build their service around it, are going to be disappointed.
In my experience, data doesn’t connect. It’s managed. Data is necessary, but it’s left brain. Data crowds out faith. And without faith, it’s hard to believe in the data enough to make a leap. Big mergers, big VC investments, big political movements, large congregations… they don’t usually turn out for a spreadsheet.
The problem is this: no spreadsheet, no bibliography and no list of resources is sufficient proof to someone who chooses not to believe. The skeptic will always find a reason, even if it’s one the rest of us don’t think is a good one. Relying too much on proof distracts you from the real mission–which is emotional connection.
So sorry Bree, I love your work and it takes a bit more than only big data.
Can you tell me why you do or don’t believe in a disruptive change in our financial planning business?
Please, leave your answer here below in the comment field. Thank you very much.
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To your success,
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