One of the many challenges facing financial advisers and brokers today is the rapid pace of changing technology.
Areas such as software, web-based communication, mobility and the cloud, are all having an impact on how firms in this sector operate in their day-to-day activities.
Even compared to only a decade ago, today’s financial advisers and brokers operate very differently. It can be daunting to think how the industry will continue to evolve with tools and applications in the areas of the Internet of Things (IoT), automation and artificial intelligence (AI) all starting to emerge. Not to mention the technology that is still to be developed.
Some of the technology trends starting to mark waves in the finance arena include:
1. Cloud computing
Cloud computing has been having an impact on the world of finance for some time, but this trend will continue as more business operations and applications become cloud-based. In fact, it’s starting to become quite common for firms to have most, if not all, of their IT environment hosted in the cloud.
This trend is driven by a number of factors, mainly greater cost efficiencies and streamlined IT infrastructure, but also, agility and mobility. With less investment in physical IT infrastructure required, growth is less restricted. Likewise, being able to access files and applications in the cloud means less reliance on physical office environments.
As the technology around cloud computing evolves, the growth in cloud options will grow, meaning more providers offering a greater array of solutions to suit different needs. To date the biggest growth has been seen in public cloud providers, an area dominated by tech giants like Amazon, Google and Microsoft.
However, there is also growth in the private cloud sector, particularly due to SMEs that are drawn to the option because of the more personalised and customised services on offer.
Automation is set to have a significant impact on finance, especially with advances in artificial intelligence (AI). Areas where automation is already starting to be utilised include regulation, compliance and financial risk management, but as the technology matures we will see this impact grow.
The purpose of automation is to increase productivity by reducing or even eliminating the resources needed to complete manual, time-consuming tasks and instead have them done at high speed with consistent quality.
So rather than have teams dedicated to areas such as data input or even data analysis, advisers and brokers can start to dedicate resources towards adding value to their clients in other ways.
As more devices get connected the internet, new opportunities arise for those in the financial sector. In fact Gartner has estimated there should be nearly 26 billion devices by 2020.
You may be thinking, what has this to do with financial advice?
According to PwC’s sixth annual digital IQ survey, financial services is one of the top 10 industries that has been investing in potential IoT innovations. This makes sense when you consider IoT’s strength lies in the transfer of data and the financial sector relies heavily on gathering and analysing data.
When it comes to advisers and brokers, IoT is likely to give rise to highly personalised financial advice to customers. It is likely this information will then be used to connect with other service providers, from insurers to health practitioners, to deliver personalised customer offers.
Like many other industries, financial advice and brokering is being disrupted by technology at an increasing pace. These are just some of the ways advancing technology is likely to impact the finance sector. It is certainly a space to pay attention to.
Andrew Tucker is CEO of IT on Cloud, a hosting service designed to provide practical Cloud Computing solutions for small and medium business. Mr Tucker has more than 20 years of experience as a business owner and entrepreneur.
In a statement provided to the financial services royal commissio...
A non-bank lender has recorded a 20 per cent increase in demand f...
The Adviser can today reveal the finalists for the highly anticip...