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Don’t be seduced by technology’s sizzle

There’s no point introducing whizz-bang technology into your business if you haven’t got your data sorted – that is the road to client dissatisfaction, warns Roland Rawicz-Szczerbo, sales director, Time4Advice

It’s over three years since the retail distribution review was implemented and after all of this time very few businesses have built efficient processes that are fully automated to allow them to deliver on their client propositions reliably and profitably.

The problem is simply that the jobs firms need to do as a priority post RDR have changed but often, the back-office systems that dominate this space have hardly changed at all. As well as recording transactions, managing commissions and policy valuations, businesses must also deliver on their service promises and demonstrate a clear line of sight between the services being delivered and the remuneration they are receiving. The client needs to be at the centre of a business’s service promise.

Client communication is critical as is the need to deliver service in a repeatable, measurable and reportable fashion. Back-office systems work in a particular way, in the way they were designed to work but what happens when a firm wants to work differently to way the system is designed?

Most firms we meet try to make the best of what they have, which results in some interesting compromises being made along the way to overcome some of the very real challenges that they need to address. This often involves buying more software to do the things their back-office system doesn’t do. Often firms look to overcome issues by throwing more people at the problem. Neither is a strategic solution and will gradually stop the business in its tracks as it attempts to grow.

A common challenge

The majority of businesses we meet have a back-office system. Often larger firms that have grown through acquisition have more than one back-office system but because they don’t have confidence in the data contained in them, they have made no attempt to aggregate them into one. The problem sits in the “too hard” box where it often stays for years.

They recognise the importance of client communications and so to facilitate this, buy a digital marketing platform like MailChimp, HubSpot or dotMailer. These are systems that contain common client data but sit independently of the back-office system(s). Firms now have the very real challenge of managing client data across at least two systems.

To fulfil their TCF obligations businesses may want to survey clients’ to solicit feedback. Since back-office systems don’t support this, firms may buy survey software like Survey Monkey and have yet another system to keep in sync. Finally, since many businesses don’t implement their software well and don’t learn how to use it properly, we see the proliferation of spreadsheets and word templates and of course Outlook is there in the mix too (ignoring all of the additional planning tools that may be in use).

In other words, firms are sunk in disconnected systems, with data that is out of control and spread across multiple platforms, which are impossible to keep in sync. They suffer from ill-defined processes and none that are automated. The result is a lot of people spending their time doing the wrong things with little if any reliable management information for the directors to allow them to do their job properly. For a regulated industry you can see the problem.

Data is the most valuable asset a business has next to its client relationships. Without reliable data, regulatory and business risk is off the Richter scale, yet despite this, the above scenario is rife and largely due to the lack of contemporary and relevant technology that works for you rather than against you.

How do the software vendors respond? They invent more technology to distract firms from the main challenges. There is a lot of buzz around client portals for instance and with good reason. Clients want access to their information so that they can engage with it at their convenience but if the data is wrong, what then? As a client paying professional fees to a financial adviser, how would you feel if when you went to the new portal service just launched by your adviser only to find it populated with garbage?

Given that much of the data stored in back-office systems is wrong and given that it is the back-office systems that feeds the portals, there is much more to offering online access to clients than just simply switching on a portal and hoping it will work. In exactly the same way that a firm has a defined strategy for its service propositions and client segments, it too needs a strategy for its online service and must understand the overhead of maintaining data accurately 24 hours each and every day.

In my previous business, we were the first back-office provider to launch what we called our online client service centre. Many of our firms switched on this capability, exposing the data in their back-office to their clients. It wasn’t long before the complaints started rolling in because what their clients’ saw was rubbish information.

So although a client portal promises so much, the reality can be very different and a robust strategy must be put in place to support online client access. This by definition must start with a good look at your data and your systems so that data spread across multiple systems can be aggregated into one and once data is aggregated in this way, effort needs to be made to clean it up and maintain it so that when clients visit your online shop front, they are pleased by what they see.

So what is needed?

At Time4Advice we believe businesses need a modern enterprise technology solution that aggregates all data into one place and it is from this “Single Truth” that firms drive their client reporting, marketing, business MI and financial control. Such a system needs to allow unfettered access to data and allow you to manipulate it as you see fit, whether by standard system reports, or via external reporting solutions such as Microsoft Excel, Xperido or other BI Tools such as ZAP BI.

Once you have your data in one place and in a good state, then you need to see how you can deliver on your service promises efficiently and profitably.

Then, after you have introduced high levels of business efficiency and are more profitable, these profits could be reinvested in the delivery of ever more interesting services such as those offered via portals and even Robo. But unless and until the fundamentals have been addressed, then you run the very real risk that you will cause more work and create more dissatisfied clients by trying to implement an online strategy that has not been thoroughly understood, made sustainable and fully tested before launch.

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