I was at a conference very recently – I know, right? – which was supposedly all about direct platforms; but actually what it was about was customers and their data. By customers I’m referring to real people, not folk who work in financial services.
Speaking at the conference (which was run by Altus, the tech consultancy) were lots of interesting folk including clever people from Google, Rocketer (a customer data agency deeply embedded in Facebook, or ‘Pusbook’ as we call it where I’m from), Experian, Money on Toast and more.
A lot of the chat from the big data guys was about understanding customers better so that you can ‘market’ – which means sell – to them more effectively. To take an example from Rocketer, if you know from all sorts of clever profiling that someone is a catastrophist (my word not theirs), then if you want to flog them car insurance, show them a picture of a car flattened by a falling tree. In investment land, I guess, you’d show someone weeping over a cashflow forecast with lots of red bars on it or something.
Shaping you offering
Through big data, you can segment people in different ways and shape your offer to them. Maybe the cleverest thing I heard was the natural end-state of this, which is segments of one. You end up with not, say, three different selling propositions, but thousands; maybe tens of thousands.
A couple of thoughts crawled along my reptilian brainstem at this point. First, financial planning is the original individual product. Each human being, or what I like to term ‘inconvenient meat puppet’, has lots of things that make them unique. Advisers and planners know this, and as a result each financial plan, when done properly, is also unique. Even if 90 per cent of the underpinnings are common to just about everyone, that last 10 per cent is the trump card.
Put it this way: the most beautifully built bridge will only result in your shattered body lying, limp and useless on the rocks below, if it only goes 90 per cent of the way across the gorge.
So I’m not convinced that, however good data is, financial planning can be fully automated or systemised. So, for as long as that 10 per cent matters, financial planning has a strong future.
But could technology make the other 90 per cent far, far smoother? Hell yes. How much time goes on the basic elements of a factfind? What if all that could be automated? It can, right now; it’s just a matter of ‘sooking’ data (technical term) from the right places. Yodlee knows this. Facebook knows this. Even Outlook knows this, and you know what a pain that is.
But, but, but…something doesn’t feel right. And I think it’s this. We can develop better segmentation and targeting. We can develop platforms that are less canine to use (as I write this, Which? has just decided that Hargreaves Lansdown is the only direct platform to get its seal of appeal. There’ll be some car-door slamming in the streets of Bristol tonight…)
But if all those new techinques and understandings are used to fire the same old products down slightly different pipes, I’m not convinced that things will move forward all that much. The same funds, the same wrappers, the same old stuff.
Maybe I’m wrong. Maybe if we sort all the rest out the product innovation will follow. Personalised products on an industrial scale. It could happen.
Back to the now
Anyway, back to the present. I was reminded about how far we have come as a sector – and how far we have to go – when the discussion turned to designing better user interfaces, and one panellist counselled ‘build for mobile first, and then worry about desktop’ – this being how to get device-responsive design nailed.
Apparently customers are starting processes, like getting an insurance quote, on a phone or fondleslab, and then finishing things off on a laptop. The more complex the task, the more likely it is they’ll jump device.
This all makes sense to me. And then I thought of our illustrious editor’s recent review of Prestwood’s Truth cashflow software, which recently unveiled cloud! capabilities! in! living! colour!
For the Luddites, this means that the doohickeys that make the whatchamacallits work on all the office ‘pooters move from being on your ‘pooter to being in big data centres in deserty bits of America and you get at them via the interwebs.
Now, much of the world moved to cloud-based some time ago, and financial services is behind the times. Nothing new there. But as Jon implied in his review – and I’ve heard similar worries from advisers – if you can access, say, cashflow modelling from any device, then what’s to stop Prestwood in this instance making it available to inconvenient meat puppets who haven’t passed CFP or whatever, and bypassing the adviser completely?
In effect, this concern is about prestidigitation. There is still a swathe of the adviser population, which believes that the techniques they use – whether asset allocation, cashflow modelling, performance reporting or whatever – is the Thing That Matters. Each time a link in the chain is made available direct (and there’s no suggestion from me, by the way, that Prestwood is going to do this – I don’t think for a minute it is) a bit more of the adviser’s special magic is taken away, until we end up with an emperor’s new clothes situation.
Getting to cloud nine
This strikes me as nonsensical. Prestwood should get its service up to a cloudy place. So should everyone else. If an adviser fancies doing on-the-hoof models on her Galaxy Note 3 during a client meeting in a restaurant, then why not? And – here’s the thing – why shouldn’t the client get to play? What is the virtue of keying asset/liability data into a system yourself when you can get the client to do it and give them a sense of ownership?
It’s that 90 per cent thing again. The client – in most cases – will be happy for the adviser to do what he does. That’s called ‘trust’ and it’s the only thing holding all this together. Maybe the client likes playing with scenarios and numbers; maybe she doesn’t. But if she does, isn’t that to be encouraged? Wouldn’t it be great for fintech providers to make their adviser-centric offerings with client ‘play’ modules so that they can interact, feel ownership and be a better client?
Can’t we get the client to bring their own big data? To build their own 90 per cent of the bridge? And the adviser supplies the expertise, the skill and judgement to take it the vital last 10 per cent of the way.
We can use natural tech evolution like Prestwood’s move to the cloud, big data on an individual basis, and good old-fashioned personal financial planning to take the whole process somewhere completely new.
Mark Polson is principal of platform and specialist consultancy the lang cat
