No one could have been prepared for the impact that the pandemic has had on the global economy. However, my 18 years working in financial services have taught me that ‘challenges are often a catalyst for improvement.’ In today’s environment, this may mean a change in how banking and financial services are distributed and offered to the benefit of the masses.
To continue to function, financial firms have been forced to adapt and change their operations and processes more in the previous couple of months than had been affected in several years. The need for social distancing may have made being truly digital even more urgent. Add to this the need to reduce the cost-to-serve and increase client base to survive difficult economic times and you have a real challenge that, at additiv, we believe makes being truly digital essential.
But digital means much more than just providing wealth management through multiple online channels. It entails a reappraisal of servicing, sourcing, and operating models to deliver greater quality at scale, which will mean more plentiful and personalised access to wealth planning for society at large.
Financial services on their own terms
Changing client needs demand that wealth solutions are offered 24/7, cross-platform, self-service financial products that work on their terms. Society expects instant solutions and requests transparent, up to date, visual insights overarching their entire history and range of assets.
Offering customers flexible solutions at their point of need is quickly becoming the norm and, in particular, the growing opportunities that Robo-advisory solutions including those that have human-assisted elements. These ‘human-assisted’ types of Robo-advisors address today’s consumers’ need for ease, speed, and yet offer a personal touch where required. And for financial institutions they enable the reach to a wider audience; anyone with access to a digital device can now sign up; offering access to customers who once didn’t have a channel to financial advisors. And, with the right technology, this audience can be accessed without the need for additional resource investment.
In fact, Robo-advisors, in general, are becoming so prolific, relevant, and trusted that McKinsey & Co. reported that Robo-advisors globally are set to manage up to US $13.5 trillion USD worth of assets this year. And already, the customer experience with Robo-advisors far outperforms that with traditional advisors because customers can now achieve their financial goals on their terms: with significantly increased accessibility, flexibility, and security at a low cost. In Africa, this has created the opportunity to shift from traditional bank savings accounts with very little earnings to investment with potentially higher earnings for the masses, thereby enabling increased wealth accumulation and inclusion.
But servicing efficiently at scale (and profiting in this new environment) requires digital transformation. And to deliver this has historically required significant budget, along with capacity and time that very few have. However, at additiv we believe that the era of long projects, high upfront Capex and complex implementations is behind us.
Serving clients whenever and however they want
New generations of customers want frictionless onboarding and services, they want to control through self-service products they can use over any app that they want. At additiv, we’ve been working to deliver our customers a set of building blocks they can use to serve their clients whenever, however, they want it.
There are massive unserved and underserved markets within Africa that need access to these products right now so they can be part of the economic flow. Equipped with large distribution channels, enterprise-level financial organizations can deliver – provided they tap into a reusable library of prebuilt, managed, and configurable micro apps and components the likes of which we develop at additive.
To allow maximum agility, fast product development and launches, and low-risk changes, the new banking architecture needs to be driven by microservices-based SaaS solutions and microapps.
Strength in numbers
Instead of competing with other players, large financial institutions can drive more value by using what their ecosystem has to offer. With this in mind, we keep our platform open and constantly plug more sources into it. If a big bank wants to publish an app using additiv, It can just use the existing modules to publish it, there is no need to consider scalability, development resources, or servers.
We bring accelerated self-development cycles and richer software that has a compounding effect over time. Everyone who uses additiv benefits, whether they choose to consume data or to launch products and services.
This is a win-win-win for everyone. Our clients win because they get more value for a smaller cost. Our partners win because, once they’re hooked up to our platform, they can easily sell to many of our clients (which we charge for). We also benefit because we can provide a richer offering that brings more features to the market faster. And because our platform is an orchestration engine we pass whatever benefits we gain onto our clients.
Our goal is to integrate best in class partners and functions, bringing all elements together, for a well-rounded picture of the end customer’s needs. Towards this end, we have built a range of implementation and distribution partnerships across Africa that are able to serve our clients efficiently and cost-effectively.
Thomas Ojanga, Managing Director, additiv DFS Africa & Member of the Executive Board, additiv AG
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