Financial services document management will be crucial in solving some of the biggest challenges that certified financial planners and wealth management professionals will face in 2017.

The rules and regulations surrounding the financial industry have changed, and numerous strategies are being adopted to shake up ineffective industry traditions.

More specifically, technology plays a bigger role in the potential to solve the financial services industry’s problems than ever, but only an understanding of its capabilities and relevance can ensure the success of independent advisers and financial services firms alike.

According to industry experts and financial analysts, one of the few certainties existing is as follows: those who rise to the challenge of technology education will survive, and those who don’t will struggle to stay abreast the ever-changing environment of the industry.

However, conquering these challenges requires understanding documentation not merely as paper, but rather as a store of value—a definition many economists would also ascribe to that thing the Federal Reserve prints to keep you in business—cold hard cash.

Document Management as a Cost Containment Technology

Any chief financial officer knows that effective cost containment isn’t simply a matter of bean-counting accounts payable and accounts receivable, and any financial adviser or financial planner will also tell you that cost containment is more than adding and subtracting expenses from clients’ ledgers.

Cost containment is also about identifying all possible costs and their impact on the operations of an organization, and this holds especially true if the organization is comprised by only one person, as is the case with most financial services professionals.

Conservative estimates stress that any given wealth adviser or financial planner ironically incurs costs of which they are not even aware.

And the problem originates with all the necessary information a wealth manager needs being on multiple devices. This creates an array of accessibility costs that can hurt the financial services professional, especially if he or she travels to see clients in specific locations.

If a client asks his or her adviser a question that requires said adviser to access a document or file in a location other than the one in which the two people are meeting, there are two available business outcomes for the adviser:

  • He or she remembered to bring the information the client requested
  • He or she did not remember to bring the information the client requested
  • He or she did not have to remember to bring the information the client requested

Under which of the above circumstances do you think a mutually beneficial business arrangement could be achieved for both parties?

Although bullet number one is good for the client, bullet number three is best for the client and the wealth manager because it requires no effort on the part of the adviser, and provides the context in which the client can receive what he or she needs from said wealth adviser.

This is only one of the numerous ways in which cloud-based document management can cut costs, and in this scenario, it’s the mobile document management application that could facilitate this—letting the wealth adviser put his entire office in his pocket, and securely.

From a risk assessment perspective, document management solutions are extremely effective cost containment tools.

Not only do they mitigate the impact of “hidden costs,” such as handling of paperwork, fax machine costs, document duplication costs, and lost file costs, document management systems reveal the true financial health of a business, for they serve as effective cost containers of “hidden costs” that would otherwise go unnoticed.

Leveraging Blockchain Technologies in the Document Management Context

Before describing why blockchain technologies matter in the document management context, and in solving the financial services sector problems of 2017, it’s important to first understand them in the context of wealth management, digital asset management, and the financial adviser’s perspectives.

When it comes to nontraditional trading of assets and wealth advisers working within this category, blockchain technologies are facilitating a new financial process:

  • Blockchain transaction requests
  • Transaction broadcast across a network of nodes
  • The transaction is added to the blockchain
  • Algorithms are used to confirm or invalidate transactions
  • Data is added to the ledger

These blockchain systems pose a very important question: how are these mechanisms documented in the broader information repository of an organization?

For starters, they can blend in to document management workflows, capture, imaging, and search confidence—bringing newfound speed and efficiency to preexisting blockchain processes.

Blockchain is the first step the modern era has taken to automate the accounting process. It has the potential to serve as an accessible ledger of all transactions across an array of networks and solutions, but it will never supplant the flow of all of an organization’s information—that is to be left up to only technologies that touch every portion of the business process, such as document management systems.

Although bitcoin is a form of blockchain, it does not encapsulate the broad implications of blockchain technology’s future, which is, however, extremely relevant to document management and financial advisers.

Overthrowing Robotic Process Automation

Although document management is only one of the many ways to prevent artificial intelligence from subsuming in-person advisories, it may be the best way.

The dynamic of the human bond and trust formed between many financial advisers, insurance agents, and their clients will only be strengthened and retained based on these professionals’ ability to complement their soft skills with built in security and controls to simplify compliance efforts.

Consumers are struggling to trust businesses and financial services professionals with their data, and it’s through no fault of advisers themselves.

In 2017, the governing and regulatory bodies within the financial services sector have set forth licensure and licensure renewals as a major priority, making it difficult for advisers to a) find the time to keep pace with licensure demands, b) provide the attention and effort clients seek, and c) outcompete the soulless robo advisers nipping at their heels.

This has created a bit of myopia in the annals of financial advisory lore—a hindsight which lauds credentials over client retention, for better or worse.

When working in financial services as an individual under either a certified financial planner (CFP) or chartered financial analyst (CFA) designation, document management solutions can stave off robotic competition through effective documentation practices, which, believe it or not, can grow a single-person consultancy considerably.

One needn’t look further than Larry Boyd (an eFileCabinet customer) to find an example of this in action.

As someone who treats his documents as a store of value (just as if they were printed money), Larry decided to compress his money-making information into a secure space where it could be transmitted to others safely while also being accessible on multiple devices, such as mobile document management applications.

However, not all supplementary technologies will impose barriers to the financial services professional. For instance, artificial intelligence can complement a different niche of financial advisory in 2017.

The Role of Artificial Intelligence (AI) and Growing through Financial Document Management

Like robotic process automation, artificial intelligence poses significant threats to the enduring value of financial services professionals.

For instance, Price Waterhouse Coopers chimed in on this discussion with its 2016 analysis of artificial intelligence trends that would shape the financial services industry.

In their assessment, asset and wealth management will hinge more securely on human judgment than use of machine algorithms, with banking and capital markets strengthening this trend as well.

Insurance agents and agency producers, however, are losing their foothold to the use of machine algorithms in decision making, with 54% of survey respondents declaring they would use machine algorithms to inform decisions, and rely on human judgment to inform decision making the remaining 46% of the time.

Although AI adoption is yet to be steady in the digital asset and wealth management space, robo-advisers are assuming a stronger foothold in this area.

However, for the same reasons that robotic process automation challenges can be resolved through document management, AI-imposed challenges can be resolved through document management tools as well.

Although document management does not supplant AI’s ability to measure information, it does reify the value contained in documents’ information. If there is a competing technology that measures AI in the financial services space better than current AI tools themselves, it’s enterprise content management (ECM).

The only issue with financial services professionals using ECM to combat AI competition is that it is a technology geared for very large organizations, and effective use hinges on interdepartmental complexity—something even wealth adviser firms do not have.

Document Management as a Cyber Security Facilitator

When it comes to cyber security in the wealth management context, advisers and financial planners of all backgrounds understand that security must pervade every step of their business process.

Without the security of data, costs of noncompliance and negligence can destroy an adviser’s reputation, which would consequently destroy any hope she or he has in earning money as a practitioner of finance.

One of the ways to transact information securely is through a web portal, but most advisers steer clear of this option to their own chagrin because they are still warming up to cloud based technologies, and at their own peril.

Reputations will always precede advisers in the financial services industry.

What will yours be?