As the industry’s standards and services body for e-commerce, Origo brings together players from across the market to agree on uniform strategies for the development of a standards-based and secure technology environment.
Ultimately, the aim is to help financial advisers cut admin overheads, streamline manual business processing (telephone, paperwork etc.) and dramatically reduce the re-keying of data, by moving to secure, online processes.
Work in this area has resulted in substantial efficiency gains for the industry in recent years, largely through the development of online links between product providers and advisers’ back-office systems.
Progress has also been made in raising awareness among IFAs about the benefits of using the latest technology and various product provider e-services. The business processes where such e-services are available mostly cover new business (including quotes), commission as we currently know it, and servicing.
However, the importance of using technology to improve the bottom line has now become critical to advisers due to the continuing tough market conditions and the retail distribution review.
Soaring RDR implementation costs and potentially falling revenue streams are among the biggest concerns for advisers. But despite all the news reports suggesting a potential mass exodus of advisers from the industry by 2012, I believe technology could hold the key to survival in the market and should be a serious consideration for all adviser firms.
Origo has been leading a large collaborative effort to ensure businesses are ready for the RDR and is currently changing standards and services for the benefit of the industry to meet RDR requirements. Online agency registration and administration services will greatly assist adviser firms in handling the expected increase in volume of agency requests such as agency closures, additional agencies and transfers and novations.
We are also starting to see some new technology solutions launch to market that are specifically engineered with the RDR in mind.
Developing a strategic business plan that uses technology to cut costs will enable advisers to deliver a viable service proposition to clients in the new landscape. Figures just released by Aviva suggest that around 40 per cent of advisers surveyed believe their revenues will rise over the next quarter due to an increased use of platforms and new technology. In support of this finding, many are actively looking to develop their business models.
The message about technology and the RDR is starting to get out there but one of the biggest challenges that adviser firms face is understanding the financial impact that investment in technology will have for their business.
How do we encourage the other 60 per cent of advisers in Aviva’s survey that this is the way forward?
Our own research into the online habits of adviser firms has shown that while the adoption of e-services and back-office systems has grown rapidly in recent years, leading to unprecedented improvements in efficiency, most firms are completely unaware of the financial benefits of doing so and are therefore not applying online practices consistently across the business. In some cases, there is a lack of awareness of e-services or there are training issues with the systems in use so they are not being used effectively. For others, overcoming the reluctance to move from familiar manual working practises is a major challenge that is hindering greater use of e-services.
But product providers and technology companies are working together to help demonstrate the value of technology to IFAs. New tools allow IFAs to assess the impact of new technology in their businesses and can now project how their annual net profit, monthly cashflow, business value and even future staff capacity will be affected.
Further technological innovation and take-up by IFAs will ultimately help to create a more profitable market.