Collaboration, not customization, the flag to wave when reviewing advice
Personalization is a great strategy if it makes customers feel valued and increases business.
But, in financial services, much of the customization that happens behind the scenes is more or less about tinkering with technology on the edge to accommodate the nuances of a business. It’s not about delivering a better customer experience or better results. This only adds to the cost and complexity.
With the advice quality review focused on how technology can be used to improve access to advice, the issue of personalization versus configuration has never been more important for the industry.
Personalization and plug in and use are totally incompatible. Plug and play depends on data standardization for systems to talk to each other and integrate seamlessly. Personalization, on the other hand, negates collaboration. It ostracizes businesses and keeps them in a cycle of customization, stifling growth and progress.
Software integration is based on mapping fields or application programming interfaces (APIs). As soon as a company starts customizing fields, it reduces its ability to play games with others. For example, something as insignificant as adding Chancellor to the salutation field, or changing the standard order of salutations so that Dr comes before M, may result in an integration failure.
Lego is beautiful
Lego is a simple way to illustrate the advantages of configuration over customization.
These colorful plastic building blocks originated in Denmark in 1932 and have enjoyed unprecedented success and longevity thanks to their standardized sizes and interlocking studs on top and tubes on the bottom.
The Lego brick has remained unchanged since its patent in 1958.
Lego in Denmark and Lego in Australia are the same. Everyone knows how to use it. Parts from different boxes and models can be mixed and still work. Kids (and adults) can put stickers on their Lego, store it in different containers, and mix and match pieces, but they can’t change the fundamental design and functionality of the product.
With Treasury Board Quality Review submissions due on June 3 and the government specifically asking how technology can improve the accessibility and affordability of advice, it’s possible to talk about the benefits of standards.
The journey to affordable advice starts with standardization. Other sectors and industries are adopting standardization. Many adopt ISO standards, which are internationally recognized by experts. Whether it’s ISO or another body, there are globally accepted standards for manufacturing a product, managing a process, delivering a service and supplying materials.
Standards enhance consumer protection, but they also help businesses operate more efficiently, be more sustainable and reduce failures. Consider the potential benefits of a standardized framework for fee disclosure statements, consent forms, and risk profile questionnaires.
A framework of three expert-approved options would provide advisors with more guidance and certainty. It would also help regulators. In the event of a client complaint, advisors could say that they followed the framework and used approved forms and questionnaires.
If counseling is to lose its artisanal stigma and become a true profession, it must pursue and embrace standardization. This is the basis of efficiency.