As our world adapts to life with Covid-19, we are finally seeing a semblance of normalcy slowly resurfacing. Clients and businesses alike are regaining confidence, and the economy is gradually recovering after months of uncertainty. However, the implications of the pandemic are likely to persist long-term, and the profound changes to client expectations and behaviors are expected to stick for the foreseeable future. Moreover, the disruption that the financial services industry has been experiencing is also far from over as seen from the recent resurgence of virus variants.  

2022 will hold its own set of unique challenges from both internal and external forces. From constantly evolving consumer preferences to innovative new market entrants, it is crucial for financial advisors to understand how to adapt and use their strengths to create meaningful value for clients. This will enable you to effectively turn challenges into opportunities for business growth moving forward.  

Here are some key trends we foresee will shape the financial service industry in the year ahead: 

1. Strategic investments in technology 

The financial services industry has done well over the past eighteen months in keeping up with the onslaught of digitalization accelerated  

by the pandemic. Undoubtedly, technology has helped unlock a whole plethora of new possibilities to transform and streamline existing processes. From AI-enabled tools for faster underwriting to data-driven marketing that advertises your products to the right people, technology has revolutionized the way financial services work and will continue to do so.  

However, in the new reality that lies in the year ahead (and beyond), it will be prudent to take a step back, relook at your current business model, and; strategize the right set of technological solutions to address changing client demands going forward. Adopting these should not solely be a reactionary response to keep up with the rapid pace of digital transformation, but conscious decisions that align with your practice needs and business goals. As emphasized by this Insurance 360° Benchmarking Survey conducted by McKinsey & Company earlier this year, insurers with targeted IT investments managed to achieve significantly better growth and performance. 

Zinc Goh, a three-year MDRT member from Singapore, offers insight into how she identifies IT investments based on what’s important to her practice. By understanding the changing needs of her clients, she strategically allocates resources on technology such as GoalsMapper, a real-time financial planning visualization software, to effectively add value to her clients’ lives. “Previously when we were in front of the client, we do a lot of drawings, and rapport is built through face-to-face interaction. But when it comes to Zoom appointments, you need something graphical that can capture their attention. (With tools like GoalsMapper), the colors and graphical representation are helpful for clients not just in COVID times. Our clients are becoming savvier and are no longer just collecting insurance plans but looking for someone who can do a whole life of planning for them with higher accuracy.” 

2. Demand for personalized interactions 

While digitalization continues to remain a business imperative, it is important for financial advisors to not overlook the value of human touch.  

In the height of the pandemic, video conferencing and other digital engagement tools enabled financial advisors to overcome challenges caused by social distancing measures. Clients also became more receptive towards digitization and self-service capabilities due to the increased convenience that they brought.  

However, with the inherent nature of financial services along with products and process complexities, building personal client engagement and trust still needs to be a vital component in your practice. In fact, personalized interactions can serve as an important differentiating factor during such socially distant times.  

Nicole Parmar, a marketing consultant who specializes in a data-first approach from JNJ Business Solutions Inc. in Vancouver, Canada, shares insight on steps for a successful hyper-personalization strategy. “For hyper-personalization to work, you’ll need to spend time creating a framework that accounts for all parts of your business. This should be efficient and effective but also fluid enough to change as data comes in. Evaluate and refine your process frequently, staying in sight and top of mind with clients and prospects.” 

3. Environmental and societal impact are key considerations 

Amidst growing global concerns over sustainability from both consumers and governments alike, the financial services industry is set to explore and expand socially responsible business methods. 

During a roundtable conducted by The Business Times on reimagining the financial landscape, Dennis Tan, CEO of Prudential Singapore, gave insight on how financial services have an increasingly important role to play in contributing to a healthier, financially resilient, and more sustainable world. “As part of a highly connected world, our futures are interlinked with both people and planet, so we must collectively work towards creating a sustainable future built on robust Environmental, Social, and Governance (ESG) practices,“ he shared.  

With sustainable finance going mainstream, financial advisors who effectively integrate ESG goals into their business will be better prepared to adapt to future regulations while contributing to a more equitable and sustainable future for all. 

As Asia’s insurance market is forecasted to grow at an estimated 8% per annum till 2030, which is double of the global average, the next year will be a decisive moment for financial advisors to chart their paths ahead. Strategically leveraging emerging opportunities while strengthening core competencies will enable your practice to thrive, regardless of changing circumstances. 

Contact: MDRTeditorial@teamlewis.com