When we think back to the year 2000, it can seem like a
different world. Twenty-one years ago, smartphones didn’t exist. Facebook,
Twitter and Instagram didn’t exist. The only social media platforms at that
time were primarily peer-to-peer messaging services from Yahoo and America
Online. Research In Motion was still two years from launching its BlackBerry
device. And people had just realized that Y2K would not disrupt digital
operations.
The technological advancement we have experienced since then
has been nothing short of remarkable. Innovations in data, analytics and
artificial intelligence (AI) have transformed our daily lives. From purchasing
a variety of products on Amazon to ordering groceries and restaurant meals on
our smartphones and splitting dinner checks on Venmo, the gathering of data
continues to optimize the services with which we interact.
And the pace of this digital growth isn’t slowing down. In
2014, there were 2.9 billion Internet users in the world, according to Internet
Live Stats. By mid-2019, that number had increased by more than half to more
than 4.4 billion internet users around the globe. Today, Americans use more
than 4 million gigabytes of data every minute.
Furthermore, consumers rely on mobile devices more than
ever. Americans look at their smartphones 52 times a day on average, according
to Deloitte’s 2018 Global Mobile Consumer Survey. The Pew Research Center
reports that more than 81% of Americans now own a smartphone — a significant
increase from 35% in 2011.
In financial services and wealth management, the benefits of
this data-driven digital advancement offer many opportunities for financial
advisors to serve clients better. While many Americans are concerned about
protecting the data they share with financial institutions and other service
providers, most are willing to provide more data if they receive greater value
for it.
According to a recent cybersecurity and privacy survey
conducted by the Harris Poll for IBM, 75% of global respondents would not buy a
product from a company, regardless of how good the product is, if they do not
trust that the company will protect their data. Meanwhile, Accenture’s 2017
Global Distribution & Marketing Consumer Study found that 67% of global
respondents would provide more data to their financial institution if it
delivered more value for them.
By utilizing a technology platform that offers the latest
advancements in data, analytics and AI — and also protects consumer data —
financial advisors can take planning to the next level. Since consumers are willing
to provide data as long as it is protected and brings them value, advisors can
enable clients and prospects to enter data at their own pace through
self-directed workflows, and then quickly harness that data to:
Identify clients’ and prospects’ financial needs and goals.
How their financial needs will change in five, 10, 20 or
more years down the road.
Show how they, as advisors, can provide value along the way.
Begin building a more detailed plan for addressing financial
needs and goals before and after retirement, which can be accessed by both the
advisor and client through an interactive client portal.
Today’s AI- and data-driven financial planning software
relies on decades’ worth of retirement patterns and other data trends to
generate faster, more accurate projections for expenses in retirement,
including health care costs. The Nationwide Retirement Institute’s 2019 Health
Care Consumer Survey reported that the cost of health care is the top concern
among future retirees, recent retirees, and those who have been retired for 10
years or more. The survey found that future retirees are even more worried
about covering the cost of health care in retirement than retirees themselves,
with 79% of future retirees stating they are somewhat or very concerned about
paying for health care, compared with 64% of retirees polled.
Some modern financial planning technology solutions allow
clients and prospects to enter personal data about their location, health,
financial goals and families using self-directed workflows, which can then be
securely shared with third-party providers of specialized health care analytics
— more accurately predicting how much clients and prospects will need to cover
health care costs in every phase of retirement.
The advancement of digital innovation and efficiency, driven
by data, enables advisors to optimize financial plans by expediting the
analysis of needs for clients and prospects — and add greater value with more
accurate cost projections and well-informed recommendations.
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