Jan 18 2022
Top tech trends that will impact the financial services sector in 2022
Over the last two years, the accelerated pace of digital transformation has left a significant impact on nearly every industry, including financial services. The sector has had to adapt rapidly to a wave of technology advancements and shifts, reshaping products and services to better meet changing client expectations.
Undeniably, technology has become an inextricable part of the human experience, for financial advisors and their clients alike; enabling one’s practice to remain relevant even as the industry evolves. Looking to the year ahead, we explore three key technology trends that are transforming the financial services landscape:
- Applied Artificial Intelligence (AI)
Still in its early days of adoption, only around 13% of the financial services sector uses AI solutions across the bulk of its processes, as found by a survey conducted by investment company Temasek Holdings earlier last year. In 2022, AI is set to be more prevalent in the industry, bringing unprecedented disruptions to the very nature of how financial advisors work.
With its ability to fundamentally reshape core processes to be more efficient and client-oriented, AI offers immense potential to deliver high-quality touchpoints that cater directly to individual clients’ needs. Using AI alongside data analytics tools, financial advisors will be able to customize highly personalized products and services based on their clients’ lifestyle needs and habits.
The possibilities that AI unlock is only just beginning, from underwriting, client experience, and marketing. As the technology matures, AI will continue to diversify and offer new, meaningful applications to enhance business capabilities. However, it will also be important to note that AI will inherently utilize your clients' data. It will be prudent to keep them in the loop on how their data is being used to formulate things such as pricing plans or claims processing. Transparency will be key to maintain your clients’ trust in you and your practice.
- Cloud Computing
Another technology set to take centerstage in 2022 is cloud-based technology. As the pandemic has shown, having an agile business model is essential to ensure the sustainability of your practice. In order to better align with clients’ needs and practice goals, the shift to the cloud will be well underway this year. A cornerstone to any practice’s digital transformation goals, cloud gives you the operational agility and flexibility needed to transform your business for the future.
Financial advisors are already rapidly accelerating the migration of core processes to the cloud, with 72% of Deloitte’s 2022 Insurance Industry outlook respondents indicating that they planned to increase spending on cloud.
As cloud technology continues to mature, this will enable financial advisors to accelerate development and launch new solutions; keeping you nimble to keep pace with the evolving needs of your clients. At the same time, the technology enables you to act as a connecting hub for all stakeholders in your ecosystem — from clients to insurtech, healthcare providers and more. Nevertheless, to make the most out of your cloud platform, ensure that you are well-equipped with the necessary skills and processes.
- Omnichannel Client Experience
The need for an omnichannel experience will require financial advisors to tap on technology to best achieve this.
Clients are becoming more receptive towards digital- and remote-interaction tools. In Ernst & Young’s 2020 Asia-Pacific Insurance Outlook Report, a significant 73% of individuals already expected to be able to accomplish any financial task on a mobile device. As financial technology continues to grow, demand for more financial solutions to be more accessible around the clock and less expensive has become even more prominent.
To sustain the competitive edge of your practice, continue building a client-first, omnichannel strategy in 2022. Enhance the in-person capabilities you already possess in the post-pandemic digital era by ensuring the ease of navigating your entire client journey through the cohesive use of digital and physical touchpoints, seamlessly providing support and advice to clients where needed.
An effective omnichannel strategy leverages the unique capabilities of digital and physical interactions to offer clients the best of both worlds.
Laura Hoi, ChFC, a 17-year MDRT member from Singapore, shares how she has embraced technology to enhance the client experience she delivers. By adopting a digital financial planning software for her practice, she is able to enhance the way she presents solutions to clients, making the experience far more comprehensive and interactive — be it through in-person meetings or virtually. One way she keeps up to date with such technology is through the Technology section in MDRT’s Round the Table magazine. “There are often articles on the latest software and apps that we can use to enhance productivity and efficiency in our practice,” she said.
The financial services industry today is standing at a crossroads. Technology is accelerating change that will revolutionize the entire industry and shift it more towards a client-centric model. To stay relevant, financial advisors will need to be ready to meet new industry standards and client expectations.