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4 Things Advisers Should Know about Technology Today

Voice recognition in a carAs practitioners, we have a responsibility to our clients and to ourselves to stay up to date on the latest tools and techniques of our trade. Most CPAs providing advice to individuals do an admirable job of staying current on tax and financial planning techniques, but not as well staying current on technology issues facing their firm. Here are some technology-related issues practitioners should be focusing on today.

The Pace of Change in Financial Technology (FinTech)

A revolution in financial technology has taken place over the last several years. If anything, the pace of change is accelerating, with implications for all financial service professionals. Until recently late adopters of technology were not penalized for being late to the game, because most of their local competitors were also late adopters. Technology has broken down regional barriers, so today you are not only competing against other local providers, but national and perhaps international providers as well. In addition, new players have entered the marketplace. FinTech startups from Silicon Valley and elsewhere are becoming a disruptive force, raising the technology bar and putting pressure on margins. The bottom line for readers is this: If you are not reviewing and upgrading your firm’s technology at least annually, you are falling behind. If there isn’t someone at the firm specifically responsible for this, the odds are that it won’t get done.

Virtual and Augmented Reality Are Not Just for Gaming

I believe that 2017 could be the year for virtual and augmented reality in financial services. These technologies have many applications in our industry. To cite just a few examples, virtual reality can play a role in gauging a client’s risk tolerance. Clients are less risk averse when markets are going up, and more risk averse after a major market decline. Many advisors say that you can’t accurately gauge a client’s risk tolerance until they have experienced a bear market. Well, why wait for it to happen? With virtual reality, they can experience the pain without the potential financial loss. These technologies use state-of-the-art 3D facial imaging coupled with artificial intelligence algorithms to track and analyze the user’s emotions in real-time, enabling them to find out how they really feel about money, so they can make better money decisions. Another example is aging. When I was much younger, I could not envision aging and retiring. With virtual reality, we can help clients envision what aging and retirement might be like in the hope of modifying behaviors.

Voice Commands

Speech recognition and voice technologies have been around for years, but the accuracy and sophistication of the technology has improved substantially. The unprecedented success of Amazon’s Alexa technology, which powered the Amazon Echo, Dot, Tap and Amazon TV is ushering in a new wave of innovation in the field. It is highly likely that 2017 will be the year that voice commands and Alexa-like technologies make meaningful inroads in financial services; in fact, the revolution has already started. For example, Alexa can already provide stock quotes, set price triggers with real time notifications for US stocks, provide foreign exchange rates, provide financial news from multiple sources, obtain information about various insurance products, calculate mortgage payments and more. Capital One customers can even get transaction and balance information on their credit cards, bank balances, auto loans and home loans by simply asking Alexa. Don’t you think your clients would like similar functionality? You may have to provide it sooner than you think in order to stay competitive.

Auto Technology

I recently went car shopping and was amazed at the advances in auto technology. Major car companies are partnering with Apple, Android and others to enhance auto technology significantly. This means that, by extension, Apple, Amazon and Android mobile apps are going to become available to a large portion of the driving public. If Alexa-type functionality extend to autos, the public will soon be checking their balances and perhaps even performing financial transactions while driving to work. Do your current providers support this functionality today? Probably not, but before long some will, and if some do and yours don’t, you might be at a competitive disadvantage.

In an article this brief, we can just give a few examples of the changes that are, and will be impacting our industry very soon. The hope is that, if you are unaware or unprepared for the unprecedented changes taking place in technology as it relates to financial services, this will serve as a wake-up call and encourage your firm to get up to speed now.

Working with the AICPA Personal Financial Planning Division, I authored The CPA’s Guide to Technology in a PFP Practice, which can help practitioners navigate the vast array of technology decisions for your practice, including general office hardware and software, document management systems, CRM applications, portfolio management and accounting software, financial planning software, custodial information and cloud computing.  For more information on the recent ransomware concerns and how you can implement cybersecurity in your practice, access this podcast.  

Joel Bruckenstein is an internationally recognized expert on applied technology for financial professionals and Publisher of Technology Tools for Today (T3) — formerly Virtual Office News, now dubbed the T3 Tech Hub. He is also the producer of the annual T3 Advisor Conference, has co-authored three books and has advised financial service firms of all sizes on improving their technologies, processes and workflows for more than 20 years.

Voice recognition courtesy of Shutterstock.


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