Technology is on the rise in the accounting industry – but it’s not necessarily a threat to your existence. Think of it as an opportunity to deliver even better service to your clients.

Love it or hate it, technology is here to stay, with robo-advice and artificial intelligence (AI) tools starting to have an impact on the world’s accounting and advice professions. In Australia, the financial technology (or fintech) revolution will be driven by the superannuation industry, with wealth management solutions predicted to account for up to 35% of the fintech market by 2020.¹  

As AI and robo-advice systems will increasingly be used in financial planning, we’re likely to see a significant shift in the delivery of financial advice itself. And of course, that means the roles of accountants and advisers will have to transform as well.

Both robo-advice and AI have their distinct advantages. But before you can use them to your firm’s advantage, you need to understand some basics about how they work.

Meet your new cyber pals

Robo-advice enables clients to receive financial advice online via their computer, smartphone or other device. Once a client has keyed in their personal details, including things like their financial goals and appetite for risk, these tools use algorithms to recommend appropriate financial products.

But while robo-advice tools can provide cost-effective and convenient financial advice, they currently don’t have the brainpower to learn from the past experiences of other clients.

AI, on the other hand, can offer a much broader range of services, from data analysis and predictive modelling. These tools can even act as a virtual personal assistant and respond to basic questions from the client. What’s more, AI has the ability to self-learn, so with each interaction it expands its knowledge and understanding of client behaviours.

Growing numbers of financial services firms are realising how beneficial AI and robo-advice tools can be for their businesses and their clients. In the years to come, we’re likely to see these tools taking over tasks like:

• Answering a client’s finance-related questions
• Processing and analysing online text
• Gaining insights into key drivers and behaviours
• Developing predictive models
• Recommending products based on life stage
• Helping a client set their goals
• Running life-event simulations
• Keeping track of a client’s spending and saving patterns

Is there still room for humans?

While robo-advice and AI have the potential to deliver financial advice at relatively low costs, there’s one ace up your sleeve that they just can’t offer: the human touch. So even though these tools might be able to take care of a client’s basic advice needs, your clients will still want personal assistance with more complex financial matters.

This opens up the opportunity for accountants and advisers to harness the capabilities of these tools for the benefit of their business. Not only can robo-advice and AI help you deliver basic advice more efficiently and economically, they can also provide accurate data reports and predictive modelling.

So there are two obvious wins here for you and your clients. The first is that you’ll gain new insights into your clients’ needs and behaviours that will allow you to serve them better. Secondly, it will free up your time to focus on the areas where you can really add value: providing financial guidance to your clients, while at the same time strengthening your long-term relationships with them.

Taking a bionic approach

Forward-thinking firms are embracing this opportunity by using robo-advice and AI to meet basic advice needs and understand how their clients behave, while complementing these tools with personalised engagement and communication.

So if you want to use robo-advice and AI effectively in your business, here are five questions to ask yourself first:

1. Who are your potential robo-advice clients – and how will you use market segmentation and analytics to identify them?
2. What type of service will you offer: a stand-alone robo-advice product, a full-service financial advice package or a combination of both?
3. Where will you develop the technology: in-house or in partnership with an external provider?
4. How will you use the product to deliver a seamless client experience?
5. When will you roll out the offering – and what type of marketing strategy will you implement to support it?

¹ Frost & Sullivan, 2016. Fintech in Australia – Trends, Forecasts and Analysis 2015 – 2020.

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