Data is the new black

by AB10 Aug 2018

Choice Aggregation CEO Stephen Moore, explains why the role of the aggregator is changing and how brokers can make an impending data deluge work to their advantage

In a people-centric industry, the key to success is often as simple as meeting customers on their own terms; understanding their preferences, extrinsic motivations and the outcomes they value; then positioning solutions accordingly.

Traditionally, this process is the result of building personal relationships, but in today’s tech-driven world, the same results can be achieved by mining the incomprehensibly huge digital footprints left on phones, computers and apps, every single day.

As concepts, big data and data governance need little introduction; as transformative tools for broking, much remains unexplained.

For Choice Aggregation CEO Stephen Moore, there is a clear and strong opportunity at the point where big data and broking converge. As a result, brokers are today in a unique position to combine digital and traditional customer service techniques to generate a deeper understanding of a client’s complete personal circumstances and financial goals.

“We are heading towards an environment where brokers are in the box seat because they know more about customers than any other channel today,” says Moore.

“What I see happening in the future is combining not just the upfront collection of customer data but also provision of that data on an ongoing basis, and combining that with the knowledge brokers have of

customers. It will put brokers in a really unique position.”

Moore’s predictions are rooted in two key developments currently on the horizon: the introduction of comprehensive credit reporting (CCR) and open banking.

CCR was first introduced in 2014, but only this year will customers be able to leverage their entire transaction histories to potentially obtain cheaper finance. Hand in hand, open banking will make vast amounts of customer data available to institutions throughout the financial ecosystem, including brokers.

“The combination of CCR and open banking means that, with the client’s permission, brokers will be able to overlay the data an institution holds on their customer with the personal insight they have on that customer. This will enable a more proactive and efficient way to help clients better manage their money; it means brokers will be better positioned than anyone in the marketplace, but that needs to be managed in the right way,” Moore says.

Supporting brokers as they move to capitalise on the strategic insight provided by CCR and open banking, Choice Aggregation has placed data governance and cybersecurity at the top of its curriculum for professional development days, along with business building and succession planning.

“Data management will be a core role of the aggregator for broker businesses. As we are seeing today, the collection of customer data has never been more important, and, even more so, protection and appropriate use of that data has never been more important,” Moore says.

The year-long calendar of educational events is designed to address the PD targets of both small and large brokerages and is reinforced with “unprecedented” investments in Podium, which Moore values in the “millions of dollars”.

“We are heading towards an environment where brokers are in the box seat because they know more about customers than any other channel” - Choice Aggregation CEO Stephen Moore

“I can’t give away too much on where we are going, but we are now working on the next generation of Podium. One of the exciting developments is that Podium will digitally enable broker businesses, and there will be more to come on that. It’s pretty exciting,” he says. “It really is a sign of the level of sophistication of broker businesses and therefore the increasing sophistication aggregators are required to provide to brokers as well.”

The changes will be rolled out in 2019 in tandem with enhanced digital and social media support for brokers. Moore continues, “Our view is that the future is about combining the digital and social interactions many customers enjoy and marrying that with high-quality face-to-face interactions. Brokers are looking to their aggregator to help them through that, and that’s really important for us.”

Increasing sophistication

Data is only the start of how broking – and aggregation – are becoming more sophisticated. Moore observes challenges and opportunities in the evolving regulatory landscape and is quick to highlight the need for brokers to become business operators – as well as digitally savvy financial strategists – in order to maintain efficiency and results.

Equally, it’s “no longer enough” for an aggregator to simply provide access to software, training and lenders, he says.

“The aggregator of the future is a true business partner and provides increasingly sophisticated support across critical elements, such as technology enablement – developing a true end-to-end platform to help with business efficiency and effectiveness,” Moore says.

“In an environment where more is expected from brokers – and that’s where we are headed – business efficiency becomes even more critical. For any successful broker, their rarest commodity is time. Any way that we can streamline processes, capture data once and reuse it, automate through the CRM when it comes to client communications. It makes a lot of sense for a broker business.”

Drawing on his own observations, Moore identifies three prime focus areas for brokers currently. Firstly, he says they must maintain the right perspective; after all, sentiment breeds sentiment. The second area of focus should remain on focus itself so brokers continue to provide great customer outcomes and experiences. Thirdly, Moore says brokers must recognise that the status quo is “not an option”.

“We know that more Australians choose to see a broker today than ever before, but across the industry, brokers, aggregators and lenders need to raise the bar to meet the increasing expectations we are faced with. Don’t be overwhelmed by negative sentiment; stay focused on this fantastic role you provide for clients, and look to associate with people who are in the same positive mindset,” he says.

Staying ahead

Choice has enjoyed a strong start to 2018 across several key metrics. Settlements have increased 11% year-on-year, with the loan book also posting 11% growth to reach almost $70bn, a result Moore describes as “very strong given market conditions”. Further, Choice now boasts a network of nearly 1,700 brokers after welcoming 300 new brokers since the start of the year.

There are a number of further developments in the pipeline. PD days will continue to take a leading role, with focus falling on industry insight and creating an environment in which brokers can learn from each other on a peer-to-peer basis.

“We recognise that not all brokers are the same and the best outcome a broker can have is to align themselves with someone who truly understands them and then tailor support to meet their needs,” says Moore.

Looking ahead, data will remain central to the continued evolution of the financial industry and its role in people’s lives. While predominantly driven by CCR and open banking, the unprecedented level of customer empowerment these are likely to enable will put the broker in a new position.

The final piece in the puzzle is that, while financial institutions must find the balance between big data and personal interaction, brokers will be well placed to leverage both. There is little doubt this will require many new skills and the unwavering support of aggregators, but with the right groundwork data will have the scope to boost rather than burden brokers.

Moore concludes, “Data is the new black, and this is a long-term, sustained trend that we will see over the next five years plus. The role of an aggregator in accurate data collection, ongoing data management, and, most importantly, the insights on the back of that data to help brokers run more efficient, effective businesses and tailored communications to clients, will be defining.”