Managing my financial journey
Managing my financial journey

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Managing my financial journey

2.3.3 Financial services business – changing technology

In this video, David Harrison of True Potential LLP talks about the technological changes that are changing the way we are conducting financial services business. He also provides a very interesting insight into the absence of an age divide when it comes to the way the public are adjusting to these changes.

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Is technology changing the way people go about financial business?
Not quite yet.
Is it not?
No - I find technology is a fascinating subject. I think technology is changing everything, as we know. If you buy a pair of shoes for example on the Internet they're there the next day. If you don't like them you send them back. Imagine something as you'd say as customised as a pair of shoes - you can buy them on the Internet. You can buy just about everything on the Internet. You can buy financial products on the Internet. But you and I as consumers have this belief that financial products are scary. We don't understand them. There's some problem with it you know. It's scary. I think in the future if we remove that, if we give people confidence, if they deal with an adviser at least once and it's an adviser that educates rather than sells then we'll see the Internet coming through. It's there. It's in your hand you know.
What about robo-advisors? These are new inventions aren't they? Are they going to take over from real people when it comes to financial advising?
First of all they don't exist. The robo-advisor is something that's been made up in the press. It's the hope that through the savings gap you know and all the rest of it that somehow, some form of artificial intelligence on the Internet will help you make very, very simple decisions. The name robo-advisors in the UK they don't exist. A robo-advisor would have to have artificial intelligence and you can understand if people are scared of a sales kind of person if they're scared of somebody who is may be a little bit larger than life then they'll go "well I'll go on my computer and get some advice". You won't. You'll get guidance. 'Robo' is something that cropped up about a year and a half ago I was in New York and I first heard that term robo-advisor. Then we searched for them as a company. My company I think is more technology savvy than any other company I have ever seen especially in financial services. We don't have robo-advisors. We have a mixture of people who can maybe charge you some money up front to get you on the right track and then give you what you want. I don't think you want me round your house or your office every few weeks. I you know wouldn't recommend that right. What I think is that you want the details of what you've got in your hand or on your laptop whenever you want. Now that's not robo advice. The difference is advice can be complicated if you want it complicated. If you just want to get ahead of information, if you just want to check what that person you're talking to has got themselves then you begin to simplify. No more than - no harder than buying a pair of shoes.
Technological change in the financial market place - is it going to create a divide between younger people who will use apps and will feel confident about technology and older people who won't?
DAVID HARRISON: Older people like me Martin, yes. No and statistically that's incorrect as well. I think twenty years ago there was a huge difference between young people fiddling about with computers going how much RAM how much ROM. Now you use Apple or you use an iPhone or use - and you just use it because it's easier and that cuts across age. I think there's a difference in age in terms of the amount of money because hopefully as you get older you have more to lose. When you're young what you should do is spend, enjoy and try and get a house and pay the thing off. When you get older hopefully you've paid the house off. Only two decisions. Get rid of the mortgage right and have enough to live once you've stopped working. So the technology question is the one that's always there. It's always pointing towards young, bright things or old daft things. I think it's wrong. I think the adoption - certainly statistically over the last two or three years the adopters of technology have been the older generation. It may be the younger ones have adopted it earlier and may be using it in a different way but as far as financial services are concerned we see no difference and we do have statistics on quite a large amount of the market.
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Since the mid-1990s, the financial services industry has been undergoing a large amount of change driven, in part, by the advent of the internet and other digital services that facilitate new ways of making financial transactions.

A 2015 survey on behalf of True Potential LLP showed that the use of digital services, including online, smartphone and wearable technology, is most popular for clients when it comes to managing savings and investments. The survey found that ‘almost 55 per cent currently use digital services to manage their savings and investments, compared with only 34 per cent who use face to face services and just 11 per cent who now use telephone banking’ (True Potential, 2015, p. 13).

New advances in technology are making the use of online and digital services easier and more accessible across all age groups. The survey data revealed that, looking ahead 5 years, 15 per cent believe that they will use either a smartphone or a wearable device as their primary way of managing savings and investing.


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