You wouldn’t have to go back particularly far to live in a time when visiting the local bank, estate agent or advisor was commonplace. The act of traveling to these places and having conversations was part and parcel of making any financial decisions. Depositing cheques, taking out mortgages – even opening a new bank account – all warranted these journeys.
The transition to mobile banking and digital platforms was a shift that occurred as a result of convenience in the first place. A lot of what people wanted to do with their finances were very simple and small actions. Something as small as just being able to check your balance was limited to printed figures in physical books.
Simplifying these requirements feels like a natural progression. However, the bigger financial decisions, like portfolio management, pension deposits, and mortgaging might seem less applicable to the mobilization and digitization trend. There’s a complexity to these things, and the stakes are so much higher. Many would probably argue that they warrant physical meetings and nuanced discussion.
However, that logic didn’t materialize into reality. Instead, technology is making its move to try and transform, streamline, and mobilize the services and decisions that previously were reserved for professional advisors, consultants, and bankers. The fallout of this shift is difficult to precisely ascertain – but it seems the decline of face-to-face service isn’t quite as clear-cut in both its decline and whether it can ever truly be replaced with next-generation, online platforms.
Interest and preference for personalized, in-person advice, particularly for financial matters, is still clearly relevant. Close to 50% of female investors claimed to prefer live appointments to discuss their wealth management in a recent EY study. Whilst only 28% of male respondents said the same, almost a third still accounts for a large chunk of customers – particularly given the higher proportion of male investors in the UK. In addition, Robo advisors and digital portfolios do make taking action on an account quicker and easier – that goes without saying. Yet, only 53% of women and 68% of men claimed to check investments via their desktop or mobile.
This suggests that, while there is clearly an appreciation for the convenience of technology in this industry, it’s not taken the whole cake. In fact, looking at some of the most popular financial apps and comparison sites, often the themes are consistently linked to simple actions, while physical meetings – and the interactive nature of them – arguably conclude more often in the completion of these major decisions, rather than being purely information-gathering or account monitoring locations.
While the need for human interaction appears to be alive and well, it certainly isn’t the only option anymore. What’s more, the biggest selling points of the digital challengers can appeal to a place that can be very appealing to customers – their wallets. Budgeting apps, comparison sites, and UK fintech business services are able to circumvent many of the fees and premiums often found in traditional financial services. Nowadays it’s certainly possible to save between utility bills, the visibility of spend in budgeting, free comparison sites, and consolidating pension apps. Other micro-investing apps like Moneybox or Wealthify also provide more options for people to grow their money rather than relying on bank interest rates.
Even for some notoriously expensive and complex financial decisions like mortgages are now becoming cheaper, accessible, and more customer-orientated. Online platforms offering comparisons don’t have to charge consulting fees, like a fee free mortgage broker called Trussle – breaking barriers of access down by offering high-quality, professional mortgage comparison and advice from the comfort of people’s homes.
The changes in financial services are just as much about culture as they are about convenience, alone. The financial crisis triggered a paradigm shift in the perception of finance. Where it once served large institutions, more customers began crying out for intuitive, low-cost (if not free) and useful alternative platforms that didn’t require the usual planning and effort on the part of the customer. This user-centric approach has fuelled the digital challengers who now fight for market share. Face-to-face consultation will always have a role to play in our financial lives.
It’s unlikely that we can all go entirely digital, but that doesn’t mean we won’t continue to flock to these applications as long as they can save us money and educate us about the complexities that used to make financial planning so hard or, at least, intimidating. We can decry the decline of the human face-to-face communications that were so normal before. However, in a world where the financial customer is increasingly coming first in business priorities, if someone wants to talk to a person and not a screen, they’ll still be able to.