Pieter Erasmus, Co-Founder TakeCtrl
Moving from demographics to psychographics requires a mind shift, a shift that incorporates technology and if well applied will allow the intermediated business to deliver end-value to consumers, advisors and insurers alike.
The middleman has taken on a new form
Although many people still think that technology, or digitalisation, means disintermediation, it is clear that there is a move towards the use of technology platforms that enables trusted intermediated businesses to better serve their clients.
What we as Ctrl say is that the conventional wisdom to “cut out the middleman” is more conventional than wise. Just because a lot of money was spent on marketing that idea, doesn’t make it valid. Understanding how a middleman can add value by using technology is very important.
We believe that the personal lines short-term insurance industry, in particular, has all the traits that make it ideal for digital distribution. It also remains one in which advice is indispensable because people increasingly insist on having more choice. They want to do business on their terms whenever, wherever it suits them, knowing that their advisor is a chat away.
Action speaks louder than words
No better way to support the hypotheses that office hours are long gone for most industries and that the intermediated financial services market is due to transform. In a short space of time, we have seen that 58% of our clients are active in the app outside of normal office hours, which includes weekends – this is true empowerment.
More so, we’ve seen that 88% of our clients reside outside of our geographical catchment area. This proves that virtual platforms provide for more, better suited, opportunities for financial advisors to engage with their clients outside of the traditional ‘bricks and mortar’ options.
Although in-person client and broker engagement will remain very valuable, it disproves the fact that ‘face-to-face’ client engagement is the only effective way that intermediary businesses can successfully engage with their clients.
So, it is clear – consumers want choice as well as easier ways to conduct their business; being in Ctrl, all in a single app.
Time for change
It is evident that technology:
- breaks traditional boundaries (digitalisation doesn’t mean disintermediation),
- is an enabler, allowing advisors to optimize their practice, with more time to focus on the more important stuff (such as client interaction),
- doesn’t mean you need to choose between robo or human advisors. It is robo AND human advisors, which seeks a collaborative approach, using each one’s respective strengths,
- is here to stay, creating an era of limitless opportunities.
The consensus is that if insurers and financial advisors do not respond to these changing consumer demands, by providing digital solutions, they are in danger of falling behind.
In closing: It is clear that financial advice (or intermediation) is just taking on a new form and that technology is shaping it. It is also clear that independent advice will be more in demand in the future and that consumers want more Ctrl. We should allow for that, or bear the consequences.