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Is this the change the industry needs?

13 September 2017Jonathan Faurie
Lizelle van der Merwe, CEO of the Financial Intermediaries Association of Southern Africa (FIA)

Lizelle van der Merwe, CEO of the Financial Intermediaries Association of Southern Africa (FIA)

Arnold van der Linde, CEO of IntegriSure

Arnold van der Linde, CEO of IntegriSure

Disruption is a major talking point in the financial services industry at the moment. Insurers are trying to figure out what their response to this challenge will be while intermediaries sit and asses what disruption means for their business. FAnews spoke with Lizelle van der Merwe, CEO of the Financial Intermediaries Association of Southern Africa (FIA), as well as Arnold van der Linde, CEO of IntegriSure, to find out their opinions on this topic.

A new outlook

One of the major impacts of disruption is that traditional business models are being challenged. We are starting to see the impacts of this in the industry, but we are waiting to see what lies ahead as technology is an ever evolving challenge.

“Disruptive technology is having an impact on financial product design and delivery. There appear to be two main streams of innovation that will impact on insurers and brokers in different ways. The first way is the advent of so called robo-advice which seeks to provide products electronically. The second major impact is products such as peer-to-peer and pay-as-you go insurance, which seek to encourage a new breed of clients, as well as existing clients to purchase covers they may not already have had,” says Van Der Merwe.

She added that some would argue that the development of online platforms allows insurance buyers to buy directly from insurers and hence the role of the insurance broker is subject to disintermediation. “Nevertheless, products are complex and vary from insurer to insurer and consumers have different risk profiles and financial needs. Therefore, there is a great opportunity for intermediaries to provide the disruptive technology to meet the changing demands of consumers. Identifying the needs of clients and providing solutions for that is after all what brokers does best.” she says.

Educating the masses?

Technology has made us more aware of our environment and the need to participate in the financial services industry. Clients often do online research before meeting with intermediaries and because of social media, they expect advice to be given in real time.

“The internet has been around for a long time and clients, especially in the financial planning space frequently approach intermediaries to test their knowledge or feel out their views on a particular solution. In this sense, the growth of new technologies that present different financial solutions is nothing new. The bottom line will be to ensure that the client experiences an efficient and seamless interaction with the broker from beginning to end,” said Van Der Merwe.

She adds that the FIA don’t expect this to change overnight; but over the longer term, clients will inevitably be drawn to the level of interaction that makes most sense to them. “The pressure on intermediaries to deliver a social media experience is less extreme in the commercial space. However, we see consumer buying behaviour changing, they base their decisions on authenticity, transparency and stories, social media is already a great business enabler in this instance,” says Van Der Merwe.

Preparing for change

The above situation means that over time, clients will become more demanding when it comes to interactions with intermediaries. The question is: are they ready for this?

“Personal contact with clients has moved to immediate gratification. Those that keep up with this will flourish and those that do not will simply disappear. True brokers have their client’s needs in their DNA and will keep on top this whatever these needs are,” says Van Der Linde.

He added that the difference between being stuck with your insurer in a traditional inflexible delivery/service fulfilment model and having the understanding of always aligning with changing client needs will make the difference.

An ally, not an enemy

The bottom line is that technology is here to stay. All parts of the industry needs to start seeing it as an ally rather than an enemy.

“There are still some people – in all industries – that view technology as a complicated, expensive commodity that is best left to techies to figure out. Technology has been and will increasingly be an integral part of any service delivery strategy,” says Van Der Linde.

He adds that if you and your business do not understand what is needed, where it is needed, when it is needed and how it is needed, and are not directly involved in the deployment of a unique offering in a way that your client prefers it to be delivered and serviced,  you are dead in the water.

Editor’s Thoughts:
Technology will impact the intermediary space in a major way in the future. How has it impacted your business? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.

Ends

Comments

Added by Cynical Simon, 13 Sep 2017
This is corporate language and thinking. For the FIA the test will be whether we succeed in taking the small broker with us into this Beaulah Land of artificial intelligence or whether we plan to leave them behind, and watch them disappear..
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