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Finance

Top Financial Practice Trends in Store for 2023

Top Financial Practice Trends in Store for 2023 3

Top Financial Practice Trends in Store for 2023 4By Travis Forman, Portfolio Manager at Strategic Private Wealth Counsel – Harbourfront Wealth Management

A breadth of new trends has surfaced. Many of these are set to change the financial services sector and individually affect advisory practices within it.

It’s a good thing despite the fact that the level of change expected to hit the industry is not welcomed by everyone. Fortunately, that’s ok – for now. Taking a slow and steady approach is what’s really needed, given it takes time to understand new technologies, solutions, and processes, and proficiency is more important than quick adoption.

Here are some of the trends that are in store for 2023.

Advancing Beyond Legacy Tech – And Understanding New Tech

The financial industry is somewhat being forced to change thanks in part to the rise of fintech startups and alternative financial services providers.

These newer industries are very tech-reliant and are pushing the envelope across an array of indirectly and directly related sectors.  Many firms and practices within the financial services space, specifically, have integrated technologies into their operations, but what will be more important beyond simple integration in 2023 is actually being able to understand the tech that is used and well.

The individuals who collectively make up a firm and/or practice need to know why they are using certain tech applications and how they benefit them. Once they understand this, the benefits can be communicated – through action – to their clients. An important caveat is that given the industry has been known to be slow in its transformation efforts, advisors may face situations where their clients are more proficient in using certain tech-centric solutions. For example, sharing files, collaborating via google docs, putting together aesthetic-looking reports, etc. These are examples of extremely simple but important actions that will dictate the course of your perception – especially for those that do not know how to do this.

Legacy systems must be replaced with more user-friendly technologies and additionally, they must be understood by their users.

Artificial Intelligence in Fintech

Artificial intelligence is already impacting financial services in many ways, from banking to investing. From automating manual tasks in back office operations to helping clients find the right financial products and services, AI has the potential to completely transform the financial services industry. Moreover, AI can analyze large volumes of data to identify unique insights that humans simply aren’t capable of discovering themselves. AI can then use these insights to generate predictions and recommendations, making

AI is a great tool for financial advisors looking to improve their client experience. AI can help advisors identify client pain points and develop personalized recommendations for asset allocation. The best part is that AI-centric tools are available in so many different and cost-effective forms. Tools like Otter.ai are invaluable software solutions to aid in conversations between clients and their advisors.

The importance here will be in striking a balance between machine learning technology and the human-centric approach that has been most valued in financial institutions.

IoT in financial services

The Internet of Things (IoT) is a network of physical devices connected to the internet. IoT technology has the potential to transform financial services in a number of ways. For example, devices such as smart sensors can be used to detect and prevent cyber-attacks. They can also be used to monitor health and safety risks in the physical world, as well as offer new financial products and services.

From managing insurance claims to managing investments, there are many potential use cases for IoT in financial services. Financial institutions that adopt IoT can expect to see cost savings and increased revenue. They can also expect to see improved customer satisfaction.

Education

Finally. The most important trend for last. Education is posed to be a lasting trend that set to be accelerated in 2023. Financial education and literacy are now more valued by clients than ever, given the rocky few years anyone who has been investing in the market has faced.

This rockiness has pushed investors to become smarter about the decisions they make and shift away from using a ‘back-seat driver’ mentality when it comes to their finances. This means they want to be active participants in their investment decisions, and in order to do so, advisors need to be ready to teach and inform their clients of new changes occurring in the market.

New technologies, digital services, and working to meet the demands and needs around client education have completely changed the customer experience in many industries, especially financial services. To successfully navigate the changing landscape, advisory practices need to develop strategies for the future now. After all, what you do today shapes tomorrow. This is why it’s so important to understand how new trends will impact you moving forward.

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