Nick Eatock, CEO at IntelliFlo, says that large and small businesses can benefit from robust technology
The market of retail financial services is big business. Very big. The trouble of course is that we are working in an industry with intense regulation and decreasing margins. With the advent of depolarisation, the competition for business is only going to get fiercer. There is strong debate over the influence that bancassurers are going to have in the new market, but nobody can argue that sizeable market shifts are occurring.
Most of the conventional front and back office systems for advisers were born in a very different market. This was a market where margins were greater, competition was lower (direct sales forces were becoming increasingly weak) and the costs of professional indemnity was not so crippling. In addition the financial markets were strong and the economy was relatively buoyant.
There was not such a pressure to develop efficient businesses and the supporting technology was primarily focused on storing increasing amounts of data - the erroneous rationale being that if you held more data about your clients it would help you remain compliant. Consequently, there has been a huge rush for more features storing more data. But has the benefit actually been realised? Have your administrative duties increased or decreased?
Other successful industries with high levels of regulation have shown time and time again that you need more from your technology. The areas that have been demonstrated to provide maximum return from technology are process, usability and cost. The challenges facing all distributors (be they adviser, tied, multi-tied or other channels) are increasingly the same. Technology can relieve the strain and help you develop a more profitable business with higher turnover.
Most industries understand and rely on the benefits of repeatable process-driven work to achieve business efficiency. Our market needs this more than any as it is highly regulated. Unfortunately, for technology to help in this, the process needs to be embedded into the software - not just an afterthought. Process efficiencies are gained throughout all elements of the business - advice, commissions, compliance, policy servicing and so on. This allows our users to generate real business efficiencies by lowering their costs and improving customer service.
For example, IntelliFlo's solution 'Intelligent Office' automatically matches up to 98% of all commission including renewals against the plans on the system without the need to attach commission to each client and the policy manually. It also allows for a three-fold improvement in the amount of work compliance staff can do through its automated risk-based file checking and remote compliance tools. This has enabled our users to reduce the costs of professional indemnity cover.
Furthermore, technology can enhance the advice process with needs analysis and financial planning tools in combination with sales opportunity technology. Advisers can write better business through technology. If advisers provide better advice for clients this enhances their loyalty, which leads to a business built on dependable revenues and an increased business value.
It is obvious really - the more you use your software the more likely you are to achieve benefits from it. Yet typical usage statistics of software show that people use less than 10% of the average software package. This is for a number of reasons: Often they do not have enough training especially when training can be so expensive. Also software suppliers inevitably try to add more and more features to their software in order to gain new users rather than take care of existing ones.
We overcome this in a number of ways. Firstly, while we do have conventional classroom training, an increasing number of users book up hour-long slots of remote training. This allows them to concentrate for a short period of time on the area required; then go ahead and immediately try out their new-found learning. This costs less than a typical day of classroom training. How much do you remember from your last full day of training?
Secondly, Intelligent Office was built from the ground up to be as usable as possible. This means that everything within Intelligent Office works in the same way. Once you have learned how to 'drive' one area then you will be comfortable in the other areas too. Thirdly, our customer service team also regularly contact our clients to discuss how they can improve their usage of the software.
Gartner, the leading industry commentator, has researched the true cost of technology. Many people believe the licence is the full cost. Actually there is also hardware, maintenance, data back-up, disaster recovery, training, customisation and the support staff to include. Overall, for traditional solutions the software licence cost is just 9% of the total annual cost. With web-based solutions, however, many of these costs are eliminated - no hardware, no maintenance, no support staff, minimal training, reduced customisation costs. Using Gartner's research it is clear how web-based solutions can be six times cheaper than the conventional desktop alternative. Web-based solutions also provide centralised data with client-driven enhancements every three to four weeks. Traditional hosted solutions, even the new .NET ones, simply cannot compete in this area.
Put all of the above factors together and you can see how large and small businesses alike can really benefit from robust and affordable technology. There are costs associated with a move in technology but these are more than outweighed by the benefits achieved.
Annuity market worth £4bn in 2017
For ‘distress’ caused
Oversees £30bn of advised and D2C assets
Less than a third of top paid employees are women
£1bn business since inception