The conveniences that technology has brought us is amazing. Our access to crucial information is almost instantaneous. It has allowed us to stay informed and connected with each other on a daily basis through social media. However, today, I want to discuss technology in the financial services industry and its implications on our lives.
The Benefits of Technology
In less than a century, technology has completely changed the way we have done banking and will continue to evolve as time passes. Traditionally, in the past, everyone understood banking as an essential service that required you to meet with an advisor face-to-face. That aspect still remains true to some extent but with the innovation of the internet, it has made the lives of consumers very simple. Instead of waiting in line to be served, you now have the option to help yourself at an automatic banking machine/automatic teller machine (ABM/ATM). These machines provided the same level of service for your everyday banking needs such as transferring, depositing, withdrawing money and paying bills. More complicated issues would require the service of a teller to assist you but for the most part, the majority of your banking can be completed at these machines.
Other great features that resulted from technological advances are telephone, online and mobile banking. Not only do you have the option to perform your banking activities from a machine but you may also perform these transactions either at home or from the palm of your hands. From monitoring your accounts to self-directed investing, you have the ability to bank without being physically at a branch.
Together, all of these services provide an alternative solution to traditional problems by allowing consumers to save time, money and the ability to be convenient. They reduce wait times at branches and allow the tellers to help those who are faced with more complicated issues. Some banking activities are time-sensitive, so it can provide peace of mind knowing that they can pay certain bills on time to avoid any penalties. Also, this helps grandpa, who has trouble visiting the bank each time because of his bad knees. He can save himself a trip by learning how to bank online! I've noticed some of the older generations are very stubborn and refuse to use these options.
I actually haven't been to a bank branch in years because of these options. The only time I was physically present was when I was working. Honestly, there's very few instances that I can think of that requires you to physically be there in-person. Just about anything can be done online or over the phone from investing to opening accounts. Here are some examples where I believe you should be in-person:
- Access to physical cash
- Making a bank draft
- Replacing your lost/stolen debit card
- Signing off on required paperwork (If there isn't an electronic signature available)
- Meeting with an advisor to be informed, ask questions or understand your financial plan (You can call or email but having your questions answered is most effective in-person)
- Not understanding/refusal to use online banking
- Application for loans/mortgages (Unless you already have financial literacy, you must understand your terms and conditions.)
Job Losses?
There's definitely been some resistance toward the changes. I actually used to be against some of them myself when I was a student. My largest fear at the time was job security. With all the introduction to technology, I was concerned that I wouldn't be able to land a job upon graduation. I thought tellers were being replaced with ATMs, advisors were being replaced with Robo-advisors and underwriters were being replaced with robots who automatically assessed applications. Little did I realize that a virus would keep me unemployed instead. I quickly learned that technology is great and all but it wasn't going to steal my job anytime soon. There's still a huge demand behind customer-focused driven roles. There are people, mostly the elderly, who prefer face-to-face interactions because of the time period in which they grew up. I've had a client tell me that he refuses to use ATMs because then I would be out of a job. It was a very sweet thing of him to say and only further confirmed that my job was secure for now.
I believe a key aspect that will keep future advisors employed is the ability to connect with their clients that extend beyond their current professional relationship. This includes what value the advisor can bring, beyond their basic services. Having extensive knowledge in a variety of financial fields will possibly prevent them from being replaced. These can include services in tax planning, estate planning, retirement planning and risk management. They need to prove that they can offer personal financial services that are specifically tailored to their client, as well as a personal connection to show that they genuinely care about their clients.
Through a previous internship, this was a common theme that came up when I was given the opportunity to ask questions. Clients know when you're genuinely looking out for their best interest. They just tend to put up with it until a new opportunity arises. This could be because they found a new advisor or because of new ways for them to manage their finances. I'm glad I was able to learn this valuable lesson from the experiences of others and not my own personal experiences. It's definitely important to keep in mind when new changes are making things easier and providing more options for clients.
Through a previous internship, this was a common theme that came up when I was given the opportunity to ask questions. Clients know when you're genuinely looking out for their best interest. They just tend to put up with it until a new opportunity arises. This could be because they found a new advisor or because of new ways for them to manage their finances. I'm glad I was able to learn this valuable lesson from the experiences of others and not my own personal experiences. It's definitely important to keep in mind when new changes are making things easier and providing more options for clients.
The Future
I don't know how far technology will progress down the road in as little as 10 years from now but it is possible that most jobs will be replaced with robots by then. I think we should all be prepared to embrace it instead of fighting against it. As a consumer, you will only benefit from these services because it helps you save time, money and it provides convenience. As for advisors, it forces them to adapt and provide additional services. This change will most likely be for the better. It will probably weed out advisors who lack both the competency and the ability to care about anything other than making a quick sale.
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