We are in the midst of a digital revolution which is transforming the way consumers expect to interact with companies.
Half of the world’s population – 3.7 billion people – are now active internet users, up 10% in the last year alone. Such rapid behavioural and technological change brings huge opportunity, and we are seeing the financial services industry introducing technology that affects the way they interact with partners and clients.
Mass market retail providers and advisers previously led the way when it comes to digital solutions by developing light-touch robo-advice, particularly in the US, to cost-effectively service clients without substantial assets.
However, advised life assurance is making great strides to catch up.
As a result, digital innovation is taking hold, driven by increasing expectations by high and ultra-high net worth (UHNW) clients, growing regulatory and reporting requirements and a drive towards greater transparency.
This does not mean that digital innovations are replacing the human touch – to the contrary they are proving to be complementary, meeting clients’ expectations for digital engagement, while improving efficiency, whilst still interacting on more complex matters.
Rising expectations
HNWIs’ expectations are evolving. They are digitally literate, and increasingly expect their wealth planning to be multi-channel in order to match the experience they receive as consumers elsewhere.
The life assurance sector is having to play catch up, compared to other areas of financial services.
Looking at the wider wealth management industry, for instance, just a quarter of wealth managers offer digital channels beyond email, while 69% of HNWIs bank online or via apps.
This disconnect presents major opportunity for providers and advisors able to meet this need. A recent CapGemini report highlighted the majority of HNW clients state that they will actually switch providers due to the lack of an integrated channel experience.
This digital demand is only going to intensify as wealth is transferred to millennial HNWs, who bring with them different behaviours and have different expectations from their providers and professional advisers.
Regulation driving innovation
The pace of change in international regulation and reporting is acting as an additional spur for technological advancement in the sector. The implementation of Fatca provides an illustration of the operational impact on many firms.
