Digital transformation is a term that is often used to describe businesses that are overhauling their once physical, repetitive and manual activities through digital and automated systems.
Yes, there’s an element of transformation going on here. However, simply altering the means to deliver the same outcomes isn’t transformation. To put it bluntly and simply, digitisation is the process of optimising existing manual or paper-based processes, whereas digital transformation is about pioneering growth through digital technologies.
The difference comes down to the relationship your business has with technology. Digitisation is reactive. In the bell curve of technology adoption, digitisation is in the “late majority” and “follower” end. That’s not to say it’s a bad thing! If you haven’t yet adopted plug-and-play technology to leverage existing features for operational efficiencies and accuracy, you’d best get cracking. The point is while digitisation is good, it’s not a transformational change – it helps you do what you already do, better.
On the other hand, digital transformation starts with the objective of expanding the relevance and value of your business. This can take many shapes and forms, from significantly enhancing an existing product or service, to developing new ones that open up new consumer segments or geographical markets. Think of the mass of un-advised Australians. If they can be serviced profitably (and trust me, this can be done) suddenly the total addressable market in Australia increases 10-fold. That’s transformation.
We’re lucky to work with numerous clients who have taken this proactive and transformative view of technology within their businesses. Here’s a quick snapshot of their stories and what they all have in common:
Case Study 1: Financial planning and mortgage broking businesses create a platform for personal financial management and education.
This business recognised an unmet need among entry-level financial planning and mortgage broking clients, who have a desire to take a more active role in their own finances. Not only did this highlight a potential competitive advantage for them, but also a way to turn generally lower-yielding clients into a more significant part of their revenue.
They developed a suite of education courses on the fundamentals of financial planning including cash flow, investments, insurance and estate planning. These courses were integrated, alongside Moneysoft’s personal financial management portal to provide clients with a more engaging personal financial management journey.
To make this more attractive they allowed clients to pick and choose courses individually, or in bundles, and then wrapped it all into a simple monthly subscription fee.
In doing so, they converted entry-level clients at higher volumes and yields. It also proved a great way to transition entry-level clients into full financial planning or mortgage broking clients, by positioning their brand and services as thought leaders through education. Brilliant.
Case Study 2: Accounting and financial planning business creates a solution for people facing financial hardship.
This business recognised that the general advancements in personal financial management had mainly been directed at people looking to grow wealth, as opposed to overcoming crippling debt. They saw an opportunity to serve individuals in financial hardship by formulating achievable repayment strategies, then consolidating and renegotiating to get a debt repayment plan in action.
In partnership with Moneysoft, this business developed a custom Digital Fact Find, so that it could effectively be used as a credit assessment application. Then, using a budget and cash flow tool, they undertook a real-time analysis of the client’s income, expenses and savings capacity, which is used to renegotiate debts into an achievable plan for their clients.
By taking existing technology, customising and directing it at different client needs, they have doubled their client base in a very short timeframe. Truly inspiring.
Case Study 3: Financial planning practice creates a real-time financial goal reporting solution.
This business recognised that as our largest generation approaches retirement, there is an increasing appetite for more hands-on financial goal tracking to ensure their financial security for this phase of life.
The outcome they envisaged for existing and new clients was perfect in its simplicity i.e. a real-time view of how they are tracking their financial goals with immediate identification of any deviations, prompting them to respond accordingly. While the desired solution was simple, the architecture in the background was more complex. Knowing they would be leveraging multiple platforms and sources of data, they employed an internal development team to ensure this was executed and managed to their own high standard.
Via Moneysoft’s API, they inject projected account balances from their modelling tool and combine those projections with real-time account data. They then created their own unique reporting process utilising external financial planning modelling software, CRM, business workflow software and Moneysoft’s custom reporting capability, to deliver an elegant and highly valuable solution for their clients.
This business is growing its client base rapidly and has excellent retention rates. Probably the most technologically and strategically advanced financial planning business we have worked with, ever.
Case Study 4: Financial planning practice creates a real-time net worth tracking app.
This business observed that while access and insight into personal finances have come a long way, the challenge for more sophisticated clients is that information often lives in siloed environments. So, when it comes to getting an accurate view of their overall net worth, these clients need to access multiple platforms and reports to get an accurate picture.
By incorporating functionality from multiple software providers, including real-time account balances via Moneysoft, they developed a mobile app that gives their clients a view of true net worth, in real-time.
They charge a monthly subscription fee to their clients for use of the app, while giving their advisers access to the information, allowing them to service their clients on a more efficient basis. A win for all parties.
What distinguishes these four examples is that they all identified a need or opportunity for technology, as opposed to simply utilising existing features to automate or digitise their current service offering.
Technology is about capability. The role of business leaders is to identify the value and benefit they can deliver for clients and then look at the role technology can play, not vice versa.
If you’re thinking about how you can deliver value differently, get in touch with us and sign up for a free 30-day trial. While you experience the capabilities of our platform, we’ll engage with you to explore innovative ways to deliver unique value to clients and grow your business.
Click here to find out more.
DISCLAIMER: The XY Adviser website and all content contained on the website is limited to general information. It does not constitute legal, financial or other professional advice. XY Adviser does not hold an AFS licence and does not provide any financial services. Nothing on this website should be interpreted as financial advice. Before making any investment decision, XY Adviser recommends obtaining financial advice from a qualified financial adviser.