The financial services profession has gone through unprecedented change over the last few years. As the Retail Distribution Review (RDR) introduced the shift from commission to fee based advice, greater transparency has been called for in investment processes. Clients are also now expecting an ever-increasingly personalised service, due in part to the ‘Amazon effect’, which means they want to experience the same choice and convenience as they get online. In addition, the regulators are subjecting every transaction to close scrutiny.
At the same time, the phenomenon of Big Data has exploded onto the scene. According to analysis by the IDC, the digital universe is growing 40% a year as the number of people and enterprises doing everything online soars. By 2020, they predict it will contain nearly ‘as many digital bits as there are stars in the universe, with the data we create and copy annually reaching 44 zettabytes, or 44 trillion gigabytes’.
The challenge for financial advisers is how you can harness this data to get reliable, factual insights to improve the investment process, rather than having to rely on gut instinct and intuition. After all, if you can use the breadth and depth of the data available just think what an advantage it would give you in satisfying not only the regulators but also in improving the services for your clients.
Approached in the right way, there is a huge opportunity for advisory firms to unlock the potential of the data and shape a strategy for their business. By using analytics, you can focus not just on the quality and integrity of the information but also consider what it tells you about your clients, competitors and colleagues.
The real strategic value, however, lies in what insight it gives into the future. You can use the data to see patterns and predict how clients will react, which in turn will enable you to tailor and personalise your communications and your services. This also becomes significant in how you price what you are offering clients.
In this way, Big Data has the potential to fundamentally change the way you do business and significantly increase the lifetime value of your clients. For as you correctly assess and meet their requirements, trust will grow and they will have no reason to consider going anywhere else.
It becomes not a question of technology but a strategic one. How can your firm derive genuine insight from the data? What’s the best way to ensure your decision-making is fact-driven, not influenced by emotive factors? How can you improve the way you interact with clients to gain a competitive advantage? Solve these and you will set the trend in customer service, improve profitability and satisfy the evolving regulatory demands of the profession.
At CleverAdviser, we are passionate believers in leveraging the power of Big Data to provide an investment service that is based on fact not human intuition. If you’d like to gain some valuable insights into how it could help your business, book a short demo here.
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