I have always loved understanding financial management. Day-in-day out my role is to help people make better life and financial decisions.
My purpose is to help people better manage their wealth (in it's entirety) in order to live more fulfilling lives based on their purpose.
But along the way I have, not so secretly loved technology. Not in a true technical sense but more a practical one.
What can technology do to improve our lives?
On Friday, I was asked to be on a panel at an FinTech conference. As I reflect on what we are going to discuss, I thought it would be wise to write down the top ten ways technology will change the way we manage money forever.
This list is in relation to Financial Advice in particular. Personal Financial management has been rather boring for far too long but things are finally getting interesting for everyone.
It will also be interesting if I review this in one year and re-do the list. I wonder how much was hot air and what has changed. In one year, I bet that this will be completely wrong and a thing of the past. The goal posts are moving faster than we are.
Everything here already exists in some form - so this is not science fiction. There are multiple companies who have built the technology already and are in battle to become better.
A bit of background to why I love technology. Ever since we got our first family computer in the 1990s, I have been working with them. I have had a fascination like many of us about how technology can change our lives for the better. When I think back to MSDOS and having to type C:\ to locate files, it’s really come a very long way.
Computers were a thing that very few knew how to use and classes were given on how to use spreadsheets and Microsoft word. We once dialled in to the internet via a 56k alien-like modem to read emails on AOL and Netscape Navigator to search the world wide web. We would play minesweeper and solitaire, and put in very floppy disks. Many of you will remember but I know one day that my kids will never understand.
But where do we go to from here?
If we think we know, we are wrong. The world will change in ways we will never be able to imagine.
In the world of Financial Advice – things are changing faster than ever. Even the more futuristic ones amongst us, do not have a clue about what is going to hit.
It's not just Financial advice. It's accountants, lawyers, property managers, real estate agents, conveyancers, buyers agents, the list goes on. Every job is at risk and I mean every job. All models are being challenged and destroyed.
The argument I hear is that people will always prefer to deal with a human – that’s true to a certain extent. But it’s only true while there’s a benefit, once the benefit goes – we as people will no longer use ourselves but use technology – especially if its cheaper or free. We do seek meaningful connections but it will be not to get things done, but to plan for the future together.
1. One-Stop Private Banking Digital Hub – Bringing it all together on one platform on an app
- It exists in clunky forms but will be released in a beautiful format. Everything you own will be on a beautiful app and you can setup other things very easily via integrations with all different products and services.
2. Free Robo-Investing
- Robo-Investment tools are slowly being commoditised and some are free – the battle to win will be won by the one with the lowest price and the lowest price will be zero.
2. Automated Free Advice & Financial Health check
- Algorithims that automatically populate with your age, goals, income, family, debt to create automated advice based on your situation. This can be produced for free – easy way to track progress
3. Group & Individual Behavioural guidance
- It won’t be enough to know your personalty, but you will know more about yourself than you have ever know by knowing why you do what you do. You will know how you compare to everyone using big data and create true awareness to your situation and that of the worlds.
4. Real-Time Digital Financial Coach – Ongoing relationship
- Financial coaching relationship with ongoing management tools to do real-time advice and make changes in real-time. Advice will be completed automatically and no more lengthy delays
5. Subscription Service – Low Cost and Content Happy
- You will have access to highly valuable content for a very low fee from trusted sources and in every form.
6. Digital Wallets & Automated customer centric banking
- The way you spend, track and send money will change completely. Cashless society and intuitive money management.
7. Artificial Intelligence – Coaching Bots
- You will have people who talk to you automatically to keep you up to date and thinking about the right things. You will be able to ask them to do tasks that you need to do and stop what you do not. These already exist and are amazingly powerful.
8. Beautiful interface, Digital Identity check and seamless setup
- It will be simple to do anything - everything will be pre-loaded and updated. One file that keeps everything up to date, no AML and instant products –loans, insurance, super, investments. Once AML is done, setup is easy.
9. Virtual-Reality and Advice on Demand via Video
- Video Conferencing but on your forehead. Financial advice coaching sessions available in short bursts like 15 Min on demand and low cost.
10. New Investments
- Peer-2-Peer Lending, free share broking, Investing in Start-Ups, Providing Venture Capital, Micro-investing, Crowdfunding investments, Fractional Property, Direct investing overseas, theme investing, responsible investing, community projects, Peer-Peer insurance.
So why will this work? or should i say why is it working?
- Ideas / Innovation – We have hubs, incubators and accelerators popping up everywhere and I mean everywhere - GenY don’t want jobs they want to create things. They will not stop until they build something that changes the world. That's no exaggeration by the way.
- Banks are on board -They are not just putting competitors out of business, they are buying them and supporting them with funding. The biggest funders of FinTech are the banks.
- Ease of Use – It is simpler to get started, low cut and it’s different. The old way of managing money is outdated, inefficient and flawed. It also has one of the lowest levels of trust. It didn't take much for everyone to turn their back on the taxi industry for uber.
- Problem is big enough - and technology is the only way we will be able to fix it.
- Profitable - there's a lot of money in money. It makes a lot of sense to build technology because the pay back can be huge.
- Money, Money, Money - $50 billion has been invested already in FinTech and that does not include the billions of man hours. It is growing every year. All the biggest technology people in the world are looking at FinTech and starting businesses.
If you have read this far, I would love to hear if you have any thoughts about the very interesting future of Financial Advice.