“Covid19 has been a real driver for digital adoption with firms realising that not having digital capability risks leaving clients out in the cold,” he says. He adds that even once things become a little easier, that the old ways will still be obsolete. “The way forward is technology that allows for ease of use; frictionless onboarding and services that can be used for self-service over the client’s channel of choice,” he says.
Going forward, he says, clients will demand as standard 24/7, cross-platform, self-service financial products that work on their terms. Banks’ customers and the banks themselves lack patience and want access to transparent, up to date, visual insights overarching their entire history and range of assets over the channel of their choice.
And having this sort of technology available has brought another issue to the fore; banks are realising that having a robust digital proposition also allows them to reach out to sectors that have previously been uneconomical to serve; notably the mass affluent.
The sector represents a massive gap in the market. Van Essen estimates the size of this market to be US$43 trillion globally with individuals having between US$150,000 and US$700,000 to invest. There are also new geographies. South-East Asia, the Middle East and Africa all have explosive mass affluent population growth and many of the fast-growing countries such as UAE also have high social mobility.
“There is a huge and pressing need for people within this category to engage and make long-term plans, especially when it comes to retirement. However, historically, access to suitable and appropriate products has been missing and it has been hard to find the right model as regards one-to-one contact and advice mixed in with a robo-offering,” says van Essen.
“It is well known that people who access financial advice and planning have better long-term prospects and that face to face is not a viable model with the mass affluent,” he adds.
Greater digitisation changes that, however. It makes it economical to do a good job if serving the mass affluent. “Digital meetings democratise things because it is quicker to do this and less expensive than attending a physical meeting. It is also possible to use call centres and bots for more straight forward things as well as share information remotely,” he says.
In practice, he thinks that a hybrid model with remote access to an advisor is the way forward. “With the mass affluent though there is likely to be a lot more self-service and there is a focus on integration with other more automated processes. The client would input a lot of his or her own data and then connect with the advisor over the phone, secure messaging or video chat,” he says. “In this way, there is a relationship to build on going forward but it is not as time or resource-intensive as in the high net worth model.”
To enable this, banks need to have the right technology such as the additiv orchestration layer. It works via APIs on top of a bank’s existing platform.
Covid19 was certainly a trigger for banks taking digitisation seriously and for providers too it has been an opportunity to show that a quick integration is possible and that the flexibility of solutions is suitable, agile and solves problems quickly, he says. “This plus the advent of neo banks and the possibility of them stealing a march has served to force the hand of many banks,” he says.
Adaptation has been key. Accordingly, the company has quickly moved to support its ethos of a new world is one where everything is a service. “Microservices-based SaaS solutions have entered the arena of banking, wealth management, and insurance and they can fit easily into financial services companies’ existing IT environment, thus allowing them to free up the innovation straight jacket, quickly, inexpensively, and with minimal disruption,” he says.
“Within the pandemic, we wanted to respond quickly and stripped away the Capex to instead offer an upfront Opex model,” he says. “This has proved popular in the middle of what has turned out to be the perfect storm for technology. The market is set to move significantly in the next year with big decisions being taken now – our Opex model facilitates this,” he concludes.