The digital advice landscape: where are we now?

Survey results:

How far along is your digital advice proposition?

Digital advice is, in principle, a great way to democratise investment advice for all clients. But with only 10% of financial institutions boasting a live platform, we haven’t yet seen the results of how this will impact the industry as a whole.
However, 70% of institutions are actively exploring or building building out a platform, so we are on the horizon of a major industry shift.

Getting partnerships off the ground

Industry partnerships, between those with a platform (or the technical capabilities to build one) and financial institutions, have become a preferred strategy. It is a less costly and more efficient way to reach your audience than starting from scratch.
With 88% of fintechs and 70% of financial institutions interested in a partnership, there is a big opportunity to collaborate and save on operational costs, and build an expanded market share.

The top industry concerns shaping digital advice solutions:

  • Encouraging client engagement: The goal of a positive and unique customer experience drives any financial institution. New tech needs to build a deeper relationship between the firm and the end-client, and provide access to new services or experiences unavailable elsewhere.
  • Proven use cases of expanding market share: No financial institution is ready to invest in a new technology without proof of concept by either the fintech or a major bank. With proven financial institution value comes mainstream adoption.
  • Capabilities beyond the front-end: Platform usability and the customer experience provide a strategic advantage, but truly transformative technology needs to go deeper and improve back-end processes as well. Fintechs are moving toward more holistic solutions, and opening the door to the partnership disconnect.

Industry demand for digital advice solutions

With widespread interest in the technology from financial institutions and growing budgets for digitisation, we can expect considerable developments in 2018.

Barriers to adoption…

Digital advice offers many opportunities and savings. As with most innovations there are some barriers to overcome. Here are some raised by our survey:
  • Overcome the cultural fears of automation, and embrace technology as a tool
  • Regulatory certainty on liability and the associated implementation requirements
  • Client demand shift toward DIY paired with improved financial literacy and the accessibility of a human advisor during major life events
  • Buy-in from both the end-clients and the advisors
  • A better understanding of the costs and benefits, and how to make use of the data
  • The launch of a digital advice programme at a Tier 1 bank with online banking integration
  • Embrace creativity to re-imagine the customer journey for a truly unique experience
Do you agree? Join the debate about the future of digital advice on 21 February in London.