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The rise of the machines
Is the growing adoption of robo-advice the first step to seeing brokers annihilated and artificial intelligence taking over, dominating the world of financial services? Recent research indicating that over a third (35%) of brokers feel that the biggest future threat to their business comes from robo-advice and technology while 85% of UK millennials have said that they’re comfortable with it. You could be forgiven for thinking that its Judgment Day for brokers and that the machines are on the brink of victory.
However rather than fear the arrival of the Terminator, why not learn how to use it to your advantage? Think of it not as an opponent, but as a digital assistant that can remove much of the mundane work and allow you to focus on what you do best.
Let me give you a couple of examples of how this is working in other industries.
IBM has built a question answering computer system – Watson – that US healthcare providers are using as a clinical decision support system. Physicians can pose a query describing symptoms and other related factors. Watson identifies the most important pieces of information, mines patient data, examines available data sources to form and test hypotheses before providing a list of recommendations to the physician. Watson can speed up and increase the accuracy of the treatment process, giving the doctor more time to spend actually caring for patients.
The law is probably one of the most archaic industries out there, resistant to change – yet the US legal industry is starting to use ROSS, a digital legal expert, to help associates power their way through their legal research. A lawyer can ask a question in plain English and ROSS reads through the entire body of law and returns a cited answer, topical readings, case law and secondary sources to get the lawyer up to speed and back to being a lawyer rather than a researcher.
If the worlds of medicine and the law are embracing technology and artificial intelligence, why can’t mortgage intermediaries?
The fact is that there is a significant percentage of the UK population who resist the idea of sitting down with someone to arrange a mortgage or sort out insurance, and that’s the millennials or Gen Y as they’re sometimes called. They’re digital natives, they haven’t had to learn how to use technology and they expect to be able to do everything from their smartphone. If you want to tap into this audience, then you’ll need to adapt how you interact with them and accept that robo-advice has a part to play.
However, they’re not the majority and for a lot of clients, particularly those that don’t fit a lender’s square box, they will benefit from a face to face service – but that doesn’t mean that you can’t embrace the advantages that technology can deliver. Consider deploying basic robo-advice as a form of digital triage to get information from your clients before a meeting. Cutting out the mundane and isolating the essential issues up front will allow you to have a far better understanding of their circumstances and needs, making a face to face session far more productive.
If you view robo-advice and other technological developments as enablers, providing you with the opportunity to differentiate your business and access a share of the market that you might not normally target, you’ll be on the path to embracing the benefits.
Of course there are costs to consider – but you don’t have to change your world in one sweeping measure. Do it in bite-size chunks, after all many trailblazers fail while the pathfinder who analyses, reviews and improves on what they see is out there generally succeeds. So introducing something as simple as an online form with a simple Q&A for clients to complete is all the starting point that you need. And if that’s an intimidating prospect, look at what your lenders and insurance providers are doing and see if you can link up with them. For example, here at the Source we offer an online integration kit which weaves our platform into your system ... meaning that when it comes to general insurance, we’ll do all the heavy lifting for you while you get to enjoy the commission.
Robo-advice is a natural progression of the digital marketplace. Rather than worry about it, go and grab yourselves a piece of the action and drive opportunity for your business.
Kevin Paterson
Managing Director at Source Insurance
