NEWS & OPINION
31 October 2020
RICHARD RATTUE MD, Compli-Serve SA
Continuity: Considerations to keep your FSP running smoothly
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here are many faces of risk for FSPs (similarly any business owners) from personnel to property, information and data, operational liability, interruption, and legal risks, among others. Continuity risk is another critical area to address. Continuity risk defines any event that renders your business un-operational. Fortunately, these potential damages can be reduced through proper planning.
what went wrong and why. Were any predications accurate; were there predictions of the risk in the first place? Realigning your risk controls may be required. FAIS legislation requires that key risks be addressed to ensure your client impact is minimal and that continuity is in place. Among the common risks for IFAs are advice risk, inappropriate conduct, the lack of a Key Individual (KI), bad processes or file records in place, and cyber risks, to name a few. FutureForewarned is forearmed proofing your practice means facing It’s important to do an assessment further risks such as technology of what could happen and why such advancement getting ahead of you, events would take place. Knowing death and disability, and thus the the possible consequences or continuity of your business. outcomes before In the time of they come to be, COVID-19, uncertainty THOSE WHO ARE has never been more allows you to be prepared. You can PREPARED END obvious. We are only calculate the cost UP BETTER OFF certain that life can and magnitude of change very suddenly, the results beforehand, ensuring but we have also seen that those you are able to manage the true who are prepared end up better expenses that come with the risks. off. While the world may be normalising or getting used to how A simple calculation of things are, it’s as crucial as ever to impact and probability have a continuity plan in place. This To determine your net readiness factor is true even if you are struggling (NRF), calculate the consequences to see ahead. You might consider of the incident by the probability of reserving a KI or putting a buy and the occurrence, minus the controls in sell agreement or business/FSP place to mitigate the fallout. transfer in place. Implementing practical measures to reduce risk is important to Only human avoid damage and minimise At the end of the day, your fate has consequences. You might, for little to do with risk. Almost all example, plan around what to do risks are caused by human action, in the case of a breach and how so can be somewhat influenced. It’s to recover from that. Some risks the unidentified risks that cannot cannot be eliminated entirely but, be managed as easily, making risk wherever possible, operations need management everybody’s game in to be able to continue in a worstyour FSP. case scenario. Plan ahead by assessing every aspect of your business and Follow ups, learnings and preparing wherever possible. This is legislation particularly important for the risks Some risks will come to fruition, you can control, so that if the ones as real situations facing you head you can’t roll around, contingencies on. Once the dust has settled and will be in place – which, through as much repair is done as possible, proper thought, will include a part of moving forward successfully successful risk management plan to should include an assessment of see you through.
CHRISMAN LOUW Head: Product Development, PPS
Technological advances impacting a financial adviser’s approach
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reputable financial adviser uses their knowledge and expertise to provide clients with constructive advice to help them meet their financial goals. This is done by developing personalised financial plans underpinned by targeted savings, investments, insurance and tax strategies. It also requires the adviser to regularly check in with clients at different life stages and when life events such as divorce or marriage trigger the need for reevaluation. Having the right tools is critical. The fourth industrial revolution saw businesses gradually introduce digital models, not only to stay relevant, but to also revolutionise the way they interact with customers. However, COVID-19 accelerated this digital take-up and has emerged as a significant game-changer to achieve sustained operational excellence. Chrisman Louw, Head of Product Development at PPS, provides some views on how digitalisation impacts the world of an adviser post COVID-19 in the insurance industry, and how advisers can ensure they keep ahead of the pack. Face-to-face versus virtual meetings Digital interaction has become the new normal in business practice as we navigate the restrictions placed on physical interaction. Programs such as Microsoft Teams, Skype, Google Hangouts or Zoom have seen a sharp increase in usage to manage client queries and expectations. COVID-19 certainly forced insurance companies to come up with digitally-enabled application processes in order to stay relevant in the life of an adviser. Moving from paper to fully digital applications Prior to COVID-19, the norm was for advisers to personally run through application forms with clients. Going forward, the adviser’s role will change as a shift towards digital application platforms are expected to emerge. Advisers have a certain DIGITAL level of control over administrative processes in a INTERACTION paper-based world. Digital platforms, and more widely used tele-underwriting techniques as a HAS BECOME means to gather information from clients, are forcing advisers to trust life insurance companies’ THE NEW fulfilment processes more. NORMAL IN Electronic signatures are increasingly being BUSINESS used to validate applications and claim forms. Medical tests for life insurance applications may be PRACTICE supplemented with appropriately consented use of historical medical records to remove the administrative burden of repeated tests. This has the potential to reduce the turnaround time for an offer of insurance. Digital claims Automation for life insurance claims will not only be the wave of the future, but a client expectation. Clients prefer to use technology platforms to interact with their insurance company rather than speaking on the phone. With this said, technology is also enforcing insurance companies to change the way claims are submitted through digital means, resulting in better customer experience and improving operational excellence. PPS as the differentiator Advisers and insurers need to embrace digital innovation as part of their futurefit business model. PPS is looking at introducing digital application forms and automated underwriting systems that are supplemented by the use of existing member records. PPS is an authorised financial services provider.
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