It’s a question we get asked all the time: Can you send me a copy of Invsta’s roadmap? And in all honesty, it’s the question that I least look forward to. Why you may ask? Because everyone has their own ideas about what a roadmap should look like, and ours is not a traditional linear roadmap by any means.
Here at Invsta, we’re driven by a purpose to inspire excitement and confidence in financial services by leveraging the latest fintech innovations. When we launched our solutions to the market several years ago, we had already spent a great deal of time and money to bring to the New Zealand market solutions that were well ahead of the curve at that stage.
Fast forward to today, and we’re finding that the solutions we built three years ago are only really starting to come to the fore now in terms of relevance and uptake across financial service providers in the New Zealand market. Growing retail platform adoption, changing customer demands and the pandemic have certainly increased the urgency for digitally-driven financial experiences amongst local financial service providers.
Given the rapid pace of development within the fintech world, we’ve chosen to have a more fluid approach to the traditional meaning of a roadmap. Instead of plotting out key development points, we prefer to let external forces guide and inspire us. These forces include local and global financial market trends, changing consumer needs, technological developments and trends, and customer requirements.
Every year, I write down the top 5 to 10 trends or forces that Invsta needs to keep on their radar. This helps us to track the development of these forces over the year and gives us a great starting point when engaging with our customers. It’s very important for us to see what the market and our customers’ thoughts are about these forces of innovation. If there’s a growing interest, our development team then gets full license to see how we can integrate or build these forces into the Invsta offering.
Let’s take a look at the top 7 forces of innovation for 2022:
1. Invsta Integration Platform
In recent years, as new systems have been bolted onto legacy frameworks, the management and processing of data have become a nightmare for IT teams. With the trend leaning towards the best-in-breed approach, using multiple technology vendors will become the norm for the financial services industry going forward. To compete in the digital world we live in today, it is simply not strategically sound to run a business from a single system.
The problem for most providers is that they do not have a central hub, or system, that serves as a catchment and distribution point for all the various data flows. It’s a bit like having a “connect the dots” puzzle in front of you, but no pen to draw the lines.
We’re big advocates of tapping into the wider fintech network to create the best customer experience possible. Hence why we built our systems using an API framework to enable exactly that. While we already have the ability to connect and synthesise multiple data streams, we’ll be investing more time and resources to strengthen the Invsta Integration Platform offering in 2022.
Our goal in 2022 is to further strengthen this functionality to make Invsta the central hub that has the power to unlock and streamline all data processes from all data sources - including legacy systems. Most companies we talk to have invested heavily into the systems they already have, so our goal is to be able to enhance and extend the life of these systems for the benefit of our clients and their investors.
But don’t these systems serve as an innovation roadblock for companies? Not necessarily. With the Invsta Integration Platform, we’ll be able to connect and process these various data streams so that information can be channelled to the appropriate outputs in a matter of seconds, such as the customer portal or advisor portal.
Practically, what does this look like for providers? We’ll be able to pull through different data points from varied sources, and present it in a graphical way for investors to get a complete overview of their investment portfolio. Another use case could be collating customer data, and using this data to set up automated workflows with targeted messaging to improve the uptake of a new investment product amongst your clients.
It’s one of the ways that we’re helping our customers to future-proof their architecture. Not only will this help reduce the administrative burden and reduce overall IT costs, but it will also give our customers the perfect platform to scale and innovate with ease.
2. Customer tracking and segmentation
The ability to serve customers in a personalised manner is the new battleground for success, as digital investing platforms have shown. Investors across the board have grown accustomed to user experiences that BigTech giants offer, and they now expect the same level of service from their wealth providers.
These BigTech giants have placed the customer at the centre of their strategies, and have amassed an incredible amount of information about them in order to offer this level of service. Various algorithms and data collection tools work in the background to help these companies build up accurate personas, which they then use to encourage their customers to take certain actions.
Globally, we’ve started seeing providers tap into this type of customer segmentation and tracking technology, as the demand for personalisation grows. Financial service providers have had to relook at their strategies, and are rediscovering the purpose of putting their customers first.
The more you know about your customers, the better you can serve them in a manner that fulfils their unique needs and desires. By providing relevant information and experiences to customers, companies are able to build trust and improve loyalty, which helps to hedge against fintech encroachment.
Balancing growth and lowering the cost of acquisition is a top priority for financial services going into 2022. Providing more value throughout the customer journey is a great tactic to help get customers over the line while reducing the overall cost of acquisition. Customer tracking and segmentation tools are essential to understand what your customers value most, while automation functionality can help you to deliver the relevant value propositions to these clients to encourage them to sign-up or commit
In the coming year, we’ll be looking at ways to improve on our analytics module by making it even easier for our customers to get relevant, actionable data to help inform their decisions. Our goal is to create an end-to-end customer data platform that will capture and amalgamate customer data from all touch points.
We’ll be looking at enhancing our segmentation functionality, and integrating it with automation tools to assist with scheduled messaging (across most messaging platforms), intelligent prompts and timely popups, which can be used to help guide investors to complete actions and purchases. These same tools can then be setup to assist with after-sales support and services, providing a consistent and tailored experience that meets the needs of each individual investor.
3. Open banking gives rise to the open economy
With more than 87% of countries establishing some form of open banking, New Zealand is considered a beginner when compared to leading nations in Europe and the UK. Closer to home, our trans-Tasman neighbours saw the launch of their open banking framework, which is being touted as one of the most effective frameworks globally.
Having a central authority to govern open banking implementation, combined with incentivising banks and lowering the overheads for smaller fintech players, will encourage more participation and innovation in the space. While open banking was launched as a way to encourage more competition and innovation in the banking sector, the goal is for this framework to carry over to many other sectors, including superannuation and telecommunications, to create an “open economy”.
Closer to home, the government announced a new Consumer Data Right to enable future open banking in New Zealand. This government-led strategy will join the already established industry-led (Payments NZ, which was created by the major NZ banks to stimulate innovation) and market-led (many organisations have created screen-scraping and reverse engineering products to enable consumers to interact with their bank accounts across the web - think home loan applications, online payments such as “pay with POLi”) incentives.
When will open banking be a reality in NZ? We’re already working through some first-case applications with our clients and other industry stakeholders, however, we don’t expect to see wide adoption of this for another year or two. We’ve started building in additional capability within our modules to cater for a wider data set. Our solutions are already API-driven, so this enables our customers to simply “plug in” to the open banking framework once it’s up and running.
Data and the information derived thereof, will be the single biggest source of competitive advantage for firms in the future. This type of accessibility will enable wealth providers to integrate with banks, streamline bank verifications for AML and help paint a comprehensive asset landscape for each customer so that advisors can get a bigger slice of the wealth pie. Not to mention that customer churn will be reduced as transactions will be seamless - the benefits open banking will have on the digital customer experience is really exciting.
4. Crypto becomes mainstream
For many of the robo advice platforms overseas, we’re starting to see that Crypto is becoming top-of-mind for these fintech platforms. This will only fuel investors’ demand for digital assets, as these platforms will make it really easy to access these alternative assets - particularly retail investors. Investors across the board can safely invest without having to navigate the complexities of purchasing and storing crypto.
For traditional providers, this has the potential to thwart growth plans, as investor’s look to diversify their investments with fintech offerings that meet their investment needs better. While Crypto isn’t for everyone, the rise in digital asset managers is a big development for the industry and highlights that Crypto is here to stay.
Throughout this year, we’ve had a few discussions with clients and the wider industry around Invsta’s capability to support digital assets. We’ve designed our solution to help support providers and their product offers, resulting in a totally flexible module-based framework that can be wired around a range of different asset classes and wealth offerings.
For us at Invsta, we’re focusing on improving our offering in this space to best support providers who may be exploring a Crypto offering. Being such a digitally-driven asset class, we envision that bright graphics, engaging tools and tools to improve financial literacy around this asset class will be key to drive adoption.
5. ESG and impact measurement
While millennials certainly spurred the growth in ethical investing, other generations want in on it too. What started as a gradual movement, has resulted in investors contributing a whopping $51.1 billion in sustainable funds compared to just $5 billion 5 years ago.
The growing awareness of the harm done by social and environmental issues has led to a wider demand for ESG investing. Investors want to know where exactly their money is going, and what kind of positive benefit it has to the community around them.
Providers that are able to showcase this type of information easily, in a graphical and engaging way, will meet the esteem needs of these investors (take a look at Maslow’s hierarchy of needs). Not only will this strengthen brand loyalty, but it could help with market share growth and promote cross-selling into other products.
From Invsta’s point of view, it’s really easy to integrate this type of information into our client portal solution - it’s a simple case of getting the right data. Whether that is from a third-party provider, from the wealth provider directly, or data that we store, our systems are developed to process this information and present it in a graphic and exciting way to investors.
Through our APIs, we’re expecting to do a number of integrations in the coming year as we have already started to see the growing need for impact measurement from the industry. For us, it’s about what partnerships we can build now with other fintech players to help bring this engaging tool to market.
6. Artificial Intelligence
We’re starting to see multiple areas where AI and machine learning are bringing some serious benefits to the industry. What seemed like a pie-in-the-sky concept not too far back, the scope and application of AI in the wealth space has grown tremendously.
From a front-end perspective, AI and machine learning hold enormous potential in helping to improve the user experience. With most of the automation currently being driven by workflows, layering AI and data leveraged from open-banking on top of this has the potential to intelligently predict the actions and needs of customers before they’ve even typed a thing.
Let’s take this scenario for example you’re a wealth provider who wants to attract a first-time investor. This investor comes across your company and decides to sign up. They give consent for their bank to share their information with your company. Your company then prepopulates the onboarding form, using the data, and completes an online AML application in seconds. Once onboarded, intelligent algorithms in the background work out how much expendable income the investor has, and analyze their purchase history. The algorithm calculates the expendable income figure, and can also suggest improvements in spending patterns to help encourage the investor to contribute more (for example, spending less on takeaway coffee). This information is sent to the advisor, who can then engage with the customer and suggest investments that best match their needs.
While the above scenario might sound a bit far-fetched, this type of personalization is not far off and leaders in the space are using AI to drive these new levels of personalization. The evolution of Robo advice is also heavily influenced by AI, and we’re seeing improved levels of adoption by traditional providers in this space - especially as they pursue their retail offerings.
At Invsta, we’re looking to utilise AI to improve the front-end customer experience and bring through some personalisation. While the market may not be ready for a complete AI overhaul, we do believe that AI adoption will gradually be introduced and become the norm in the coming years.
Some of the key functionality we’re working on includes the use of dynamic content with key bits of information to help guide investors to make better-informed decisions. Improving financial literacy is a key motivator for us, and we’re continually looking at ways that digital tools can help in this area.
With our robo advice module already set up, this is ready to be configured to the particular needs of wealth providers. As data starts to become more readily available, we’re continuously enhancing and improving our robo advice offering to best meet the needs of the market.
7. New Age of reporting
We’re in the age of information, but with less time to process it. Gone are the days of lengthy PDFs, which are being phased out by more dynamic and engaging tools. In the past, we saw a huge focus on low-value data points which held very little relevance for investors. Instead, we’re now seeing more high-value information coming through on-demand.
Rich media, such as video and audio will become the standard in the not-too-distant future. Investors are already pressured for time, and easily-digestible snippets of information could be key to improving financial literacy over time. This is particularly important for first-time investors and retail investors, who can’t necessarily afford the services of an advisor.
AI and automation are crucial in minimizing the workload when it comes to producing these types of media, and there are already video creation tools that enable you to integrate your data points and instantly create graphics. These graphics can be available on-demand and can be made accessible across numerous channels, including social media, email, and customer portals.
We’ve developed our customer portal to be flexible and robust enough to cater to a variety of media types. With each implementation, we’re continuously bringing through new functionality and engagement tools. By engaging with our clients directly, we get a more comprehensive understanding of what some of these real-world applications need to look like. While drawing on inspiration from other leading companies, we will continue to leverage data and present it in a highly engaging way that is not only on-brand but also reflects the needs and wants of our customers.
Less road-mapping = better agility
Agility is something that gets bandied around, and we’ve definitely been guilty of throwing it around in the odd sales presentation or two. But in all honesty, it’s a term that is very close to our hearts - particularly as we are in the fintech space (which can be a bit turbulent at the best of times). We're committed to ensuring that the financial services industry thrives in the face of digital disruption, and to uphold that promise we employ agility to enable us to grow alongside our clients and market changes.
Every implementation allows us to enhance and improve our offerings and gives us the platform to innovate alongside our customers. While we love the opportunity to grow and develop our own offerings, we’re also pretty agnostic and are happy to work alongside other vendors to offer the best in breed solutions to our customers. Not only does this drive innovation, but it also helps us and our customers to remain responsive to market shifts and...yup, you guessed it... remain agile.