Archive for the ‘Technology’ Category

Full cycle electronic trading – a myth?

Thursday, February 25th, 2010

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!

Written by Nigel Smith - Visit Website

Social Media in Financial Services

Thursday, January 14th, 2010

#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!

Written by Nigel Smith - Visit Website

An interesting change of strategy?

Thursday, January 7th, 2010

It’s been talked about for some weeks, but finally Google have made their announcement launching their new baby, the Nexus One smartphone. Once more, the comments have centred around “…it’s an iPhone killer”, “…it’s another step forward for Google’s Android Operating System” and alike. For the geeks amongst us, the device seems competent, with a number of unique features and smart functions – it even looks good.

Engadget have a really good review which can be read here

But what interests me more is the way that Google has seemingly changed their strategy. Back in the nineties, when working for a product provider, there was some quite considerable nervousness about the dominance of Microsoft and the potential for them to enter into our core market and, using their consumer muscle, skew the distribution of financial services products – even software solutions like Microsoft Money were seen as a threat to the IFA sector by providing some degree of advice to clients – especially as, at the time, Microsoft Money was distributed free of charge with all new Windows PCs.

The official Microsoft line was that they were not interested in developing distribution of financial services products and their only interest was in providing enabling technologies to key industries – as time would tell, in the main that has happened – the role of Microsoft Money (now obsolete) and it’s web counterpart now called MSN Money has changed and its impact dissipated.

Now I think competition is good – in the mobile ‘phone space, Microsoft has been producing its mobile operating system for some years – it’s a bit of a ‘Marmite’ solution – some love it, some hate it. What they never did was to manufacture the hardware itself. The strategy was to nuture mainstream manufacturers, eg HTC, Hewlett Packard etc, to adopt their solution and for Microsoft to be an enabler.

Google however, seem to be on a mission – it is clear they have their sights set on core markets that have been controlled mainly by the Redmond machine (in the computing space) – web-centric cloud-based, services, new mobile operating systems, intelligent mapping, email etc. etc. spews out of Google – they are changing attitudes and causing significant disturbance. What has yet to be seen is the impact of competing directly with the manufacturers who used to be partners – it could be a stroke of genius or quite a rocky road.

Written by Nigel Smith - Visit Website