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The data dilemma

Two weeks ago, Focus Solutions published some interesting research on the services being offered by life office websites. But the names of the life offices were not revealed.

The reason for carrying out the research was, no doubt, to help draw attention to its web-based version of Goal: Proposal to submit business electronically to life offices.

This technology means life offices can put electronic applications on their extranet sites as well as make them available via the various portals but I cannot help thinking that, in delivering this as a solution, Focus is providing an answer to the wrong question.

Product providers have made sizeable investments in extranets to deliver information and services to IFAs.

However, the reality is that they have seen only meagre take-up of such services by advisers and questions are being asked about the lack of return on the money spent.

The notable exception to this is Skandia, which is seeing something approaching all the valuations it gives to advisers and policyholders now being delivered in this way.

Equally, the take-up of electronic new business has to be a major embarrassment to all concerned and, as one of the proponents of the NBEC project, I include myself in this.

Simply linking two initiatives that have so far failed to deliver does not strike me as a recipe for success.

Unless we are going algebraic, two negatives rarely make a positive. What the industry is trying to achieve is to change the core working practices fundamentally of independent advisers.

We need to look in far more detail at how advisers work and deliver solutions that really do make it easier for the adviser to work using technology than using paper-based solutions.

If we are going to make electronic new business work, we need to understand why it has not taken off. I think we need to look at the exceptional areas where volume is being achieved.

This falls into two categories – Towry Law&#39s use of the NBEC project and electronic term, where the most successful office appears to be Legal & General although Norwich Union and Friends Provident are also progressing in this area.

I will be looking at the electronic term sites in detail in a month or so. In the meantime, I would like to concentrate on why the Towry Law project has been such a success.

The reality is that, in one highly significant aspect, what was delivered under the NBEC project was not what the IFAs had originally. I believe it is recognised by many life offices that it was a mistake to remove the requirement to prepopulate the PACs from advisers&#39 back-office systems.

The effect of this is that the adviser has to key a large amount of information into the PAC. Most IFAs are not known for their typing speeds, so this is a significant barrier.

On the other hand, if we gave the IFAs the ability to reuse the data they already have in their existing systems, we might make it easier for advisers to submit electronic applications.

It is over a decade since PA Consulting, in research on behalf of Origo, identified that, in a typical mortgage transaction, an adviser may write the name and address of the client as many as a dozen times while simply filling in the various application forms. Isn&#39t it about time, then, that something was delivered to relieve this burden?

In the past few months, we have seen some interesting developments in the IFA systems market. The Exchange seem to be refocusing itself substantially on helping advisers manage their overall businesses via the Office Web solution. 1st Software recently announced the budget version of its Adviser Office solution for smaller advisers.

Intelliflo&#39s Intelligent Office product offers some interesting alternatives to the traditional approach and Synaptic is announcing its Front Office system, incorporating fact-find/needs analysis/customer relationship management and database tools, to complement its product research professional product.

It is encouraging to see so many organisations making substantial investments in technology to help advisers. As I see it, the industry needs to work collectively to harness the power of the information held within these systems.

Product providers are keen to benefit from what is called straight-through processing. Basically, they get the information electronically and it automatically populates to their system without the need for costly and error-prone manual entry.

This needs the IFAs to enter the data but, if we are going to have STP, let us do it in such a way that the data moves electronically from the adviser&#39s system where it already exists and pre-populates to the PAC.

This would mean the adviser would have far less information to enter. Indeed, if you combine prepopulation from both the back-office and the key features document, the chances are there would be very little for the IFA to fill in at all. In this case, doing business electronically could become far more attractive to IFAs.

I have not yet seen the new web-based version of Goal:Proposal but a while ago I was shown a webbased PAC renderer which Synaptic Systems has developed and was very impressed at the speed at which it operated over the net.

If, through the use of advisers&#39 existing data, it can be made easier for them to complete electronic applications, the providers may finally see the payback they are under such pressure to achieve from their investments in extranets and new business. This leaves the question of how to get the data into the system in the first place.

Many IFAs have existing systems and while several system providers are investing in significant enhancements to their systems, it appears that others who possibly lack the capital base to invest in their businesses seem happy to continue to milk their existing customers who are locked in with data in their old systems.

Product providers could also play a significant role in helping these firms and those who do not have any systems by passing data back to advisers.

In two weeks, I will be looking at the various options available to do so and discussing their respective merits.

Ian McKenna is a consultant and director of the Financial Technology Research Centre, which works for a wide range of industry organisations, life offices and technology companies, including Microsoft and The Exchange. He can be contacted by email at

Tel: 020 7935 2599


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