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Human-led advice deals AI a knock-out blow

02 September 2021 Gareth Stokes

The introduction of artificial intelligence (AI) and machine learning alongside automated robo-advice solutions will create more opportunities for human-led advice and improve the advice content of future adviser-to-client interactions. This was among the views shared by a panel of technology experts on day two of the 2021 African Insurance Exchange (AIE) conference. The discussion on ‘innovative means of insurance distribution’ might have sounded a bit anti-human; but turned out to contain one of the most rousing pro-human advice messages given during the conference.

Financial advice must be more accessible

“The first point to take on board is that there is a discrepancy between how the financial services industry talks about advice and the definition you get from consumers,” said Riaan Singh, a partner at PwC, who had spent countless hours thinking about how customer experience drives better financial wellbeing outcomes. He pointed out that financial product providers and their distribution partners should be leveraging technology to make financial advice more accessible and to match financial needs with affordable and appropriate products. It is no longer considered good enough for a retirement saver, for example, to have a 30-minute financial planning conversation in the year prior to retirement. 

Singh said that accelerated digitalisation through pandemic resulted in providers focusing on the hygiene aspects of their businesses in order to pivot from a face-to-face to an online sales environment. “The focus was on digitising processes, presenting a single view of the customer, providing self-service tools and streamlining practice management for financial and risk advisers; there was too much focus on building the business of today and not enough on the business of tomorrow,” he said, before offering eight quick fixes for product providers. We have summarised these as follows: 

  1. Focus on holistic, advice-led sales rather than product push.
  2. Be authentic and purpose driven.
  3. Engage with customers over multiple channels.
  4. Offer consistent financial information over multiple channels.
  5. Embrace hybrid advice models.
  6. Help your customers to connect with their future selves by allowing them to visualise the impact of their financial decisions.
  7. Use customer data to offer hyper-personalised offerings.
  8. Consider activity-based fee models and think more about appropriate fees for advice. 

Right channel, right product, right time…

Product providers should approach consumers using the right channel, with the right product and at a time “when the consumer has a propensity to act on their approach,” said Willem van der Post, CEO and founder of xTech.Captial, who encouraged advisers to use data analysis, AI & machine learning to drive their processes.  “Consumers often exhibit irrational behaviour sets and financial services providers spend too much time trying to change those behaviours rather than working with them,” he said. The need to connect meaningfully in the digital realm is ticket to play in a future in which every consumer will have access to a satellite network via a smartphone or similar device. In this future utopia, marketing evolves from a spamming endeavour to one of presenting a customer with a value-add solution at his or her time of need. 

Van der Post said that sophisticated algorithms could be used to improve customer persistency across the sales journey and, of course, increase sales efficacy. “When a consumer clicks through on a digital ‘lead origination’ advert, they are not always in a position to take a call about their earnings or healthcare needs,” he said. “So, we take them as close as possible to the underwriting stage using a chatbot [supported by] intuitive learning algorithms”. Another interesting observation is that financial product sales can increase 100-fold by simply meeting the potential customer when or where they are likely to be looking for the product in question. 

The value in human ‘touch’

“We are looking for innovative solutions to bring insurance to people who have not had it before; we partner with telecom firms and other platforms to address access and affordability shortcomings,” said Gustav Agartson, Founder & CEO at Milvik (BIMA). “Our experience is that when you talk of insurance sales, independent of who you partner with or the customer base you are going after, there is value in human touch,” he said. BIMA, which has served more than 40 million customers in the low- and mid-income consumer segments since 2010, maximises its opportunities by controlling the sales process in-house. Digitalisation can improve the customer onboarding experience but should never replace the benefits of human conversation. 

Human advice is also integral in ensuring adequate communication during the financial advice journey. “The financial services industry must multiply engagements with people throughout the journey,” said Singh, who warned about the ongoing reliance on material written at second year varsity level. He encouraged financial advisers not to be misled by the perception that product providers and retirement funds were doing a good job of communicating to their clients: In other words, engage with consumers at an appropriate level and / or assist them in navigating the complexity of, for example, retirement benefit statements. 

Laying foundations for human-led advice 

According to Singh, product providers that identify a technology and then look for problems to solve are on the proverbial ‘hiding to nothing’. He suggested speaking to customers to understand what their problems were and then leveraging the wealth of technology available to you to solve for their needs. And Agartson added that purpose-driven businesses that leveraged technology in the right way would attract the best talent and deliver the best product and experience for consumers. “New technologies such as AI and machine learning are great and will make humans more effective in giving advice,” he concluded. In his view, technology will make the advice process more human by freeing up human advisers to spend time on more relevant tasks. 

“Large legacy organisations that have been successful over prolonged periods of time see technology as a disruptive force; but more often than not it is the inertia of their management teams rather than technology that causes the disruption, ” concluded Van der Post. He suggested that large insurers collaborate with fintech and Insurtech firms, because the smaller nimbler players would become like “piranhas, eating up consumers and leaving the large firms to carry the burden of regulation”. 

Writer’s thoughts:
Automated and / or robo-advice platforms caused quite a stir when they first came to market; but financial and risk advisers soon realised such solutions had shortcomings. Now, the fear is that AI and machine learning could supercharge these robo-advice platforms… Are you worried about the impact of tech innovations on human advice, or do you still believe that digital platforms and related tech intervention are mechanisms that free up your time for more meaningful advice conversation with your clients? Please comment below, interact with us on Twitter at @fanews_online or email us your thoughts [email protected]



Added by Suzette Dittrich, 02 Sep 2021
AI can only be a benefit to the Financial Advisor to help the client, if the Admin and aftersales is efficient and on the ball!! Getting business was and never is the problem, what is delivered to the client after sales is and always will be. Concentrate on that instead!
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