June 12th, 2024 | Robert Batt, Client Success Manager, CapitalROCK
In the past, a financial professional typically included someone who hung out a shingle, received their respective licenses and/or accreditations, and sat across the table from their clients holding their yellow pad and massive 10 key adding machine. During my 25 plus years in the financial services and fintech industries, the types of tools and capabilities of software programs have exploded from just a handful (providing their solution on a CD rom) to hundreds (that now live online).
This progressional evolution of technology, along with continually changing regulatory requirements from the DOL, FINRA, and SEC, has created an expanding need for training and plays a crucial role in streamlining processes and enhancing efficiency. This article will explore why “fintech” (financial technology) is important, some of the common pain points, and how training can provide a solution to move forward.
Automation, Workflow Optimization, and Customer Experience
In this new technology age demand for digital financial experiences has led to the rapid growth of fintech and rules based systems. The ultimate goal of leveraging fintech is to be more profitable as a firm and set up individual representatives for success. Fintech provides solutions to address the biggest challenges all financial firms face:
- Reducing costs.
- Properly maintaining and leveraging client data (and do it in a safely)
- Reduction of paperwork and other time-consuming activities
- New governmental regulationChanging regulatory landscape and staying compliant
Automation and creating integrated workflows solves many of these problems. By creating a standard workflow and utilizing integrated technologies, you can create a repeatable process that allows for time and cost savings, operational efficiencies, and better representative and client retention.
Fintech Efficiency
Why is it important to address fintech? As today’s financial landscape rapidly evolves, staying competitive in a crowded playing field is critical. Here are some statistics that illustrate the importance of this topic:
- Fintech market is projected to grow at a CAGR of 26.87% by 2026 (1)
- 75% of millennials are using at least one fintech product or service. (2)
- Financial services institutions saved $11.1 billion globally in 2020 by leveraging AI (Artificial Intelligence) technologies. (2)
- The total potential cost savings for banks and financial institutions from using big data & AI is estimated at $300 billion. (3)
- 60% of consumers want to transact with financial institutions that provide a single platform, such as social media or mobile banking apps. (4)
Let us explore some of the major reasons why fintech is important:
- The ability to deliver faster and more reliable services to their customers, enhancing overall satisfaction.
- It helps in reducing operational costs by automating processes and minimizing errors. Leveraging rules-based systems provides time savings for end users
- These days, data is king. Being able to collect, analyze and leverage a lot of data helps with strategic planning.
- Enhance regulatory compliance surrounding elements such as Reg BI suitability, PTE 2020-02, and Reasonably Available Alternatives.
- Firms that successfully leverage Fintech have stronger positions in retaining and attracting talent.
- Frees up time for stakeholders to work on other projects and ideally gives the ability to look forward and create new opportunities.
Pain Points
Making an omelet does require cracking a couple eggs. As with any endeavor, there will be some pain points that will need to be overcome. Here are some common themes I have heard over the years when discussing fintech.
- Resistance to Change: One of the biggest ones is resistance to change. Many in our industry have developed workflows and processes that have worked for many years. Moving away from what has always worked in the past can stoke fear in some.
- Time: One thing financial representative do not have a ton of is time.
- Limited Resources: Not all firms are built the same way and each firm needs to determine allocation of resources.
- Different Skill Levels: People have various experience and comfort levels with technology.
- Data Security: Especially in our industry, this is not to be taken lightly and is a valid concern for firms and representatives alike.
- Return on Investment and Integration: Will the solution benefit the firm, including the factoring in of existing processes and documentation?
Role of Training
In my experience, the role of training and how it is implemented is probably one of the most key factors for consideration as firms and technologies evolve. It can mean the difference between having a well-oiled machine and a virtual trainwreck.
Overcoming the pain points while promoting the “payoffs/benefits” in a manner that is time efficient and engaging typically will provide the best results.
What does this look like? Obviously, if this were a cookie cutter approach, it would be easy. Everyone’s firms are different, and the resources are not the same, but below are some ideas to consider when building out your training program:
- Sell the “Why”: Once the business decision has been made to adopt the new software/program, one of the greater hurdles is to get initial buy-in from the ultimate users. Lay out the business purpose and the benefits of implementing the programs. A clear message goes a long way. Be sure to address not only the “why” from a business perspective, but also hit key points as to how the representatives will benefit from using the new program.
- Pilot the New Software/Program to a Certain Group of Representatives Before Releasing it Firmwide: This helps identify improvement areas to make for a better end user experience, addresses representative concerns, and provides anecdotal evidence to share for the implementation.
- Create an Internal Landing Page for Home Office and Representatives Alike to Access the Resources Online: Additionally, provide contact information on how representatives can obtain support for any questions and/or issues relating to the new program.
- Create User Guides, Videos, and FAQ’s: You can coordinate with the Fintech provider to assist in providing information and material. One item that would be helpful here would be to provide a visualization as to how the new program will fit into the overall process.
- Provide Periodic In-Person or Webinar-Based Training: These trainings can be differentiated based on user type (beginners/new hires versus more experienced users). They can also be topic based.
- Have an internal resource that can answer questions and assist in the creation of the above-mentioned resources.
The Point
As technology grows, the chance of it taking over some tasks and processes that historically have been manual will increase. It creates numerous possibilities to reduce and/or automate steps in workflows, cut down on paperwork, and provide a better experience for both the firm and customer. It is inevitable, especially with the statisticss provided above, that there is no slowing down. Training will be key to allowing firms and financial representatives to keep up with demand and the ever-evolving Fintech landscape.
https://www.hurix.com/5-reasons-why-the-fintech-industry-needs-workforce-learning-and-development/ (1)
https://gitnux.org/fintech-statistics/ (2)
https://zipdo.co/statistics/big-data-in-fintech/ (3)
https://www.investopedia.com/terms/f/fintech.asp
https://www.oncourselearning.com/resource/complaince-training-for-fintechs
https://www.kitces.com/fintechmap
https://www.lorman.com/blog/post/39-statistics-that-prove-the-value-of-employee-training