This week sees the publication of our B2B Portal Survey for 2010.

We’ve spent a good number of weeks, talking to all the major B2B portals, gathering hard data as well as their thoughts and aspirations on how their businesses are going to respond to 2012 and RDR et al.

On the face of it, they continue to grow with Exweb from 1st – The Exchange dominating the market with 14.2 million quotations in November (our sample month), representing 61% of all quotations being run via on portals; Assureweb and Webline chasing with just under 4 million quotes and 4.5 million respectively. I was interested in acquiring data for True Potential and while their market share of quotations is low at 1½% (representing 340,000 quotes) their conversation of the quotations to electronic applications is by far the highest in the market. Currently they achieve a 3% conversion rate compared to their nearest competitor achieving only ¼%.

In an extract from our report, the graph below shows the difference in conversion of illustrations to real new business:

Now this got me thinking – there has always been an issue with portal comparison services – they are designed to proliferate individual illustrations from all the participating providers and from the portal perspective, the more the merrier. In fact, for some of the portal commercial models, the greater the number of illustrations generated, the bigger the invoice!

It is without doubt that for ‘commodity products’, comparison engines are very helpful – some time ago, I remember doing some analysis that suggested that over 60 percent of term business was ‘placed’ via a portal. I use the word ‘placed’ advisedly, because by comparison what has always eluded the portals is fulfilment (business submission). With illustration to application ratios of over 20 or even 30 to 1, it’s mightily inefficient. In fact, with the advent of advanced product provider extranet services, advisers use the portals for initial market analysis and then repeat the whole process again prior to submitting the business (as final confirmation of what has been proposed and agreed). The providers struggle to identify the effort and cost of new business acquisition against actual business put on the books. The problem is that there is no direct correlation between client data used in the pre-sale process and business submission stage.

In the past, I have written about the allure of ‘DIY’ portals. Indeed, you can understand providers, distributors and solution vendors getting together in order to provide a greater amount of process integration – a cradle to grave approach. It would appear from the data that we have acquired, that solutions which focus on the elusive STP, like True Potential, are starting to drive process efficiencies and to reduce the proliferation of pre-sales transactions that are largely ‘throw away’ effort. As I have said before, I really do believe the other portals can (and should) capitalise on this approach. In fact, there is a danger that failure to act could cause some of the other Solution Providers to build it themselves and so potentially introduce further inefficiencies.

Ultimately, what I have yet to see in any portal supplier’s solution is a complete, full-cycle, seamless, end-to-end process – one where from initial point of contact with a prospect, they are able to go through the advice, research, fulfilment submission and servicing processes completely, comprehensively and quickly – why is it so difficult?

The situation brings to mind a discussion I had with a very smart, senior board member of a sizeable life company back in the mid-90’s. At the time, we were discussing electronic new business and he was being particularly sceptical about the rate of adoption of electronic new business services. I suggested that by the end of the decade (2000), all business would be electronically submitted – he retorted that it would be2010.

He was wrong…- however, he was a lot closer than me and we are still frustratingly some way off!

#socialmediafs is the Twitter hash tag given to the first day of a conference run by Philip Calvert of IFALife.

Having had an horrific journey through snow and ice yesterday, it was pleasing to see my efforts being rewarded by it turning out to be a really interesting day, with many and varied expert speakers, ranging from IFA firms to Google UK. The theme of the event revolved around the growth of social media and the potential for financial services firm to embrace it effectively. The audience comprised one-man band IFAs, product providers and solution providers – an eclectic mix!

The presenters and topics for the day were:

Alan Stevens, the Media Coach
Successful online PR strategies for IFAs and financial brands

Jaime Steele, North Financial Management
How to build a successful Social Media and online strategy within a financial planning practice

Nicola Webber, Digital Director at The Gate
How to build a Financial Services brand with Social Media

Thomas Power, Chairman of Ecademy
Know me, like me, follow me – Why Social Media matters in Financial Services

Mike Linskey, Director of Fincision Financial Services Business Consultancy
How the internet will drive the future of financial advice. The ‘perfect storm’ creating a golden age for distributors, manufacturers and early adopters

Lee Provoost, Technology Strategy at Headshift
Social Customer Self Service in the Financial Services sector

Nick Bamford, Chief Executive of Informed Choice
Is an online execution service the big opportunity IFAs have been waiting for?

Robert Pink, Financial Services at Google UK
Marketing through a Digital Lens – using the Internet to target and communicate with your customers

What struck me was how receptive the less knowledgeable businesses were to the new (to them) concepts – there were people making copious notes.

So what did I take away from the sessions?

Well – it has become vital to have a digital marketing strategy – an integrated strategy that encompasses the conventional and the digital, that projects the image, values and proposition of your particular business. Social media is emerging as a vital part of prospect or client contact – for some organisations, as we have discussed in previous blogs, it can augment knowledge of your product or service by direct contact with your target market, both good and bad.

Will it go away? Most certainly not – with Google adding realtime content into their natural search algorithms, live, relevant information is going to be even more important; that means businesses generating engaging and compelling content as a natural part of their output. Not doing it means missing out – not getting the attention of an audience who are using social media sites more than watching television, even those who were thought to be out of the ‘internet generation’, who are incidentally, one of the biggest growth categories of services like Twitter.

So get planning now – actively research your options – it is important!

Over the past few weeks, we’ve had a number of conversations with ‘industry spokespeople’ discussing the impact of RDR on the B2B portals and also how they interact with some of the solutions’ providers.

If we cast our minds back to the early development of the portal, one of the driving motivations of services like Exweb – even the Windows’ based Common Trading Platform (CTP) before it – was to ‘own’ the desktop. The mantra was that the service should be universal and that the portal should be exactly that, the primary route from intermediary to product provider and back.

Now, for a variety of reasons (some technological and some political) that never really happened – the commercial grip on the electronic distribution space by The Exchange was dissipated by the industry’s creation of Assureweb and Webline’s march from niche to mainstream. In many ways, the portals’ influence in the value chain was weakened and the focus was more on new business activity than the complete end-to-end cycle.

In the meantime, the creation and adoption of Origo’s XML messaging standards created a technical environment that significantly lowered the barrier to entry for other players to develop services and solutions in the electronic space – hence the development of offerings like True Potential.

What we are seeing now, is a realignment of the portals’ role and a good example is one that is provided by Assureweb. They have developed a robust machine to machine interface, APE (Assureweb Powered eBusiness) that drives significant volumes of illustration traffic through their infrastructure. APE and its equivalant in other providers such as Exweb and Webline, allows for a uniform user experience via their point-of-sale solution of choice, without presenting the native portal screens and validation control – this ‘black boxing’ is starting to overtake the traditional quotations’ mechanisms and indeed Assureweb now state that higher volumes are driven through APE than their web interface.

Now, I mentioned Origo standards earlier – this is where, I think, things get interesting – with the development of distributor specific offerings, like True Potential etc., there is an increasing opportunity/temptation for solutions’ providers to consider building their own links direct to the product providers – on the face of it, if you are firm where you want to actively control the entire end-to-end process and perhaps have limited panels, then the lure of ‘DIY’ is compelling. However, there are a number of ‘gotchas’.

Standards

There is a wide variation in the adoption of Origo standards by providers – you might think you can build something once and use it many times, but in reality each provider implementation will be different;

Volume

If you are successful, you’re going to have to ensure you can cope with the volume of traffic and usage – that’s not cheap;

Change

We all know that in this industry things just don’t stay the same – whatever you build, you’re going to have to maintain, update and upgrade it -you might need to change the product providers as you re-assess your panel(s) – your solution will have to stand the test of time.

So despite the promise of the software houses building direct links, because it’s ‘easy’, there are some areas where the portals can excel – they’ve been doing it for some considerable time and understand the vagaries of building complex and robust transactional systems. One major network, decided to use a portal rather than build it themselves precisely for the reason of not re-inventing the wheel, but more important, being able to switch providers with relative ease. It is especially true where the type of transaction moves from new business to other classes such as contract enquiry, commission and new business tracking.

So where does this leave us post RDR? Well, certainly the march of the messaging hub will continue a-pace – you will see the diminution (or even the demise) of the portal web service. With differing advice models, remuneration differentials and other product pricing factors, the ability to acquire information and data easily and effectively from the provider of choice will be vital – why build it yourself – use a portal.