Using technology to become a business leader gives advisers an advantage
Innovation has been a concept that society has struggled to come to terms with over the years as previous mind sets have slowly disapproved and science fiction has transformed into science fact. But how does one cope with the changing world, and what are the consequences to resisting this change?
History has shown that mankind is simply not good at taking innovative ideas on board. Innovation has always been dealt using an arm’s length approach rather than an intimate, knowledgeable approach. However, it has been the innovators which have made their mark on society rather than the followers.
The innovators dilemma
One of the reasons that the majority of humans are not great innovators is because they are defined by social norms. Often, when a person surfaces with an innovative idea, there is also very little financial or institutional backing given to the person. Speaking at the Financial Planning Institute (FPI) Convention on June 25, Chairman of social media network Mxit, Michael Jordaan pointed out that this is the first step towards innovation. He said that ideas are not considered as an innovation but they are dreams. Taking an innovative idea and implementing it is the true essence of innovation.
“The second aspect of an innovation is to create a company culture that does not have an immune system. These companies are adaptable to change and can change systems accordingly. It is imperative that these companies adapt to technology quickly and that they cannibalise systems,” says Jordaan.
The third important aspect of innovation is to spread the intelligence pool within an organisation and to leverage off the talents of others. Jordaan points out that no one is smarter than anyone. If faced with a problem, the company should pool the wisdom of the company.
Incorporating this into client interaction
Innovation can only happen in an empowering culture where management is open to the possible opportunities that change can present. This is certainly true for tied agents, but for independent brokers, it is easier to adapt to this aspect.
“We need to be innovative when we engage with our clients in order to remain relevant. An adviser can go through all of the conventional business steps when writing up a policy and they will be able to survive, but at what cost?” said Jordaan.
He adds that innovation is hard, however, humans are suckers for recognition. It is important that we recognise and reward people who have good ideas.
It is also about providing a value proposition to customers in a clear and concise manner. This was the motivation behind the development of an online application by private equity investment firm Phatisa which tracks the growth of an investment over a defined period of time.
“When a company makes an investment, particularly in the private equity sector, there needs to be a defined return on investment. Often this is calculated using complicated formulas which are sometimes not very accurate. In conjunction with technology company App Your Game, we have developed an online tool whereby we can track the internal rate of return to see whether we are on track with realising our return on the investment,” says Bradley. While this is an app which has been specifically designed for Phatisa, App Your Game Director, Yusuf Abrahams points out that there is a lot of scope for similar app development in the financial services industry.
What will be the drivers of innovation?
The age of technology has changed the world at a rapid pace. The large scale availability of the internet has wet the appetite of the public who have become hungry for knowledge and technology which has the ability to change their lives.
Demand is the major driver towards innovation. The internet has made it possible for people to search for anything and is often used as an important information source. This is a good development for advisers and the industry as a whole as an educated audience will buy the right products and services to cater for their developing needs. Advisers can also use technology to educate the public on aspects of the industry that they are unsure about. The ability to track the performance of funds, which will include historical data, will allow the public to make informed decisions.
Telematics is another example on the positive impact that innovation is has on the industry. Discovery Insure is busy running its Drivers Challenge whereby the public can download an app which will monitor their driving behaviour. Scores are assigned to each individual and these scores are compared with others throughout the country.
This has two benefits, the public are encouraged to become better drivers as they are participating in a competition and are also shown which aspects of their driving behaviour needs to be improved. It also benefits Discovery as they are able to adequately price their risk and gain insights to driving habits which will possibly allow them to tailor make products to suit specific individuals.
Editor’s Thoughts: Innovation should not be feared and should certainly not be resisted. In today’s society change is inevitable and those who are able to adapt to change and use it to their advantage become industry innovators and business leaders in their industry. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts [email protected].
