Adapting Business Models

Adapting Business Models For The Tech Savvy Consumer In The Wealth, Life And Pensions Sector

05 October 2021

Wealth, life and pensions businesses face a challenge over the next few years as they decide which is the best model to adapt to changing customer needs and expectation. They increasingly find themselves competing against companies with multi-service, low cost, digital led business models.

New kids on the block

This disruption is happening at both ends of the technology spectrum. Challenger businesses like Nutmeg or Pensions Bee are digital first, meaning their business model is founded on a truly digital ecosystem that customers operate within. By being digital first, they offer customers instant access to accounts via smart phones or wearable tech, anytime and anywhere.

At the other end, tech giants, like Amazon and Google, have indicated intentions to enter the financial services market. These players operate vast interconnected platforms that offer distribution that traditional WLPs can only dream of.

One thing that must be accepted is that digital first isn’t just a novelty. It is exactly the kind of service that consumers want.

The pandemic changed everything

The COVID-19 pandemic was the catalyst for change that had already begun outside the wealth, life and pensions sector. Consumers had rejected the usual support model for a non-digital provider, which for most meant long, unsatisfactory interactions with call centres – when they could finally get through.

The success of online banking was a key part of the process. Natwest’s banking app had in effect become its largest branch, with customers abandoning their brick and mortar branches in their droves as they could now perform tasks at the press of a button. This experience developed a new mindset in the collective consciousness of consumers. They no longer want to be forced to conform to a particular way of working – they want services that are easily accessed, simple to use and satisfy their needs. Immediately.

The use case for extensive use of digital interfaces was proved when lockdown came. Consumers only had the option of remote access and they loved it.

Businesses without baggage

These businesses are proving successful and they do not have the same legacy system dependencies that still exist across the financial services industry.

Silos are dismantled and the modern technology enables them to launch new products whenever they wish, rather than when the IT systems updates dictated.

Better still, the tech drives ongoing efficiency by making it possible to continually make process improvements.

Artificial intelligence and machine learning are becoming the norm for managing customer interaction and claims, often without the customer being aware that they are speaking to a ‘bot’. The tech leverages insights from the vast amount of data generated in order to improve the customer experience and develop new, even tailored, products that consumers actually want.

Governance is improved from better controlled processes.. The data these systems generate is easily interrogated by the system and allows for transparent and seamless reporting to the regulator.

Making the right choice, finding the right partner

The difficult choice that many wealth, life and pension providers face is whether to transform their business by adopting and implementing this kind of technology.

WLPs have spent the past 20 years making significant investments, in trying to transform their businesses.With hindsight, it could be argued that the greatest lesson has come from the realisation that business transformation is not solely an IT or operational issue, but impacts every single process within and outside the business.

It is also not something they need to do on their own. Too much time – and money – has been spent on reinventing the wheel with an awful lot of duplication of effort.

The smarter approach is to find a partner offering cutting edge technology that is both flexible and scalable. Better still, one who can offer a service based approach that will support each process element not just with technology, but with a highly experienced and knowledgeable team. That is what you should expect of the 21st century outsourcer.

You don’t know of any? You’re looking at one right now. Let us tell you more about how we can help.

Talk to us today

It’s Time For Meaningful Change

This new report from EQ gives a comprehensive view of the current landscape for the wealth, life and pension industry.

Download the report