From Covid-19 to Consumer Duty, recent market movements have made it impossible to ignore the onward march of digitalisation and technology. Early adopters taking a risk on new tech have the opportunity to set themselves apart, while those who stick their heads in the sand may well risk being left behind.
The Intermediary sat down with Michael Common, CEO of Nivo, to discover new developments in digitalisation, and how tech is easing frictions in the property market.
Can you introduce yourself, and the business, for our readers?
My career background has been in financial services, and always delivering new technologies, new processes, new operations, and new systems. In the early part of my career this was in a major UK bank.
I started asking what financial services would look like if you designed it with the customer in mind. What we spotted was that people like to communicate, in pretty much every aspect of their lives, through instant messaging.
However, when it came to a lot of banking process, we were still relying on e-mail, phone, paper and telephone. These were the processes that tended to frustrate customers the most – they took the most time, and they were operationally inefficient for the organisations themselves.
Nivo was born out of an idea about how we could make an instant messaging service that stands up to data security and the rigours of the financial services industry and other regulated industries.
We call it verified identity messaging (VIM) – it’s secure, instant messaging combined with digital identification tools, and it also includes capabilities that make the collection of data, document evidence and approvals as easy as possible.
It’s primarily in financial services, but other industries as well – anywhere that relies on these legacy channels. We make it way more efficient for the organisation’s customers, while tightening up security and data controls, which helps with compliance as well as fraud risk.
Do you find that people are reluctant to pick up these new systems?
I’ve spent my whole career in change management, and people don’t change easy. It’s really difficult, and people have been relying on these channels since they started doing businesses, so it takes a lot of convincing for a lot of people that this is a better way.
Luckily enough, where we’re up to with the businesses, we’ve got tonnes of examples where we can point to the material difference that using our technology has made. It’s not an incremental thing. Customers absolutely love it, the efficiency and the speed of processes is measurable, it’s tangible.
The pandemic also helped, giving people a choice of how to communicate, with programmes like Slack and Teams showing the power of messaging in making things efficient and better – that obviously resonates with people.
What advice would you give to brokers about choosing the right tech for their needs?
Brokers have got a real opportunity, compared with some of our bigger clients, to be agile and experiment with different things. They don’t have to believe that something’s going to be an absolute.
Quite often you see organisations of all sizes burn so much time and effort deliberating on things and analysing potential outcomes, where really nobody knows the answer until you try. That’s true of technology, in particular.
Brokers have a unique opportunity in many ways to be masters of their own destiny. They don’t have big boards and governance structures, they don’t have shareholders – they can make decisions far more easily. I’d encourage them to use that agility to try things out, find the right systems, and have an open mind.
What are some of the key challenges facing people when it comes to digitalisation?
The ‘know your customer’ (KYC) process introduces a lot of the friction that we’re trying to address with our system. This is where clients are getting forced into quite labour-intensive and inconvenient high friction processes.
The problem sits in the ability of these organisations to quickly assess the various options and technologies now available to them on the market, and assess the various risks associated.
Asking them to change the status quo, to embrace and adopt technology. That’s difficult for risk-based organisations like financial institutions to contend with, because traditionally, change is something that has to be very carefully considered.
The challenge is how quickly they can make those risk assessments and get comfortable, to keep up with customer expectations, and also to realise the clear opportunities for their own efficiencies and customer experience.
What they need to realise is there’s a lot of additional control with using electronic systems – it’s not just purely to make things more efficient. There’s many additional controls that simply aren’t available with more traditional systems.
Is Consumer Duty pushing people more towards this type of tech?
Primarily, we look at ourselves as a communication channel. When you look at what the Financial Conduct Authority (FCA) wants, it’s about being easy to deal with, and easy to get hold of. It has specifically focused on the issue of big call queues, only being available during office hours – inconvenient things like these, which are a bit like the market status quo.
Ultimately, what the regulator is trying to do is drive people towards the available technologies that can help make them more accessible to customers.
We can obviously help significantly, providing a 24/7 communication channel through a trusted and secure programme – they can get in touch and ask questions, and they don’t have to sit around on the phone. This level of convenience is what people love.
We’re all pushing in the same direction.
What do you see as being the big tech trends for 2024?
I think the big tech trend in the world is artificial intelligence (AI). I look at some of the problems that we’re trying to solve for our clients, helping them be more efficient and expedient and reduce the time that gets burned on admin.
Some of these processes involve interpreting information that’s been provided and translating that into a different set of fields, to key into a lender portal or put into a particular lender’s documentation.
Humans make errors, and then you need a layer of checking to make sure they’re doing the right thing, or correctly interpreting lengthy policies that are written in various different places, and can change all the time.
This is essentially the stuff that AI can do much more quickly, more efficiently, you ultimately more cheaply. It can also arguably do it more accurately. It won’t be perfect – that can be a bit of a challenge as some people want it to be right 100% of the time, but of course, humans don’t.
Still, I think AI is going to be big, and that’s certainly something we’re looking into. For us, we see it as a co-pilot. It’s not going to replace jobs, but it will be a technology that sits alongside the work that people do, taking away the monotonous, repetitive, convoluted stuff, that needs the interpretation of large bits of data.
The other big trend is that there are multiple parties involved in a deal and a transaction, and those multiple parties work with other multiple parties. So, making risk decisions and reaching consensus and getting various technologies or changes accepted by your organisation just becomes that much more difficult.
So, a lot of where we’re focusing time and attention is on collaboration tools. How can we bring all of these processes together into one place to eliminate a lot of the waste and inefficiency that exists as a result of different organisations having to interact with each other and make different decisions.
Looking for more insight into the fast-moving tech developments shaping this market? Take a look at our Tech Special Focus issue here.