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User experience in digitalisation dominates

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Speaking at a BlackRock media panel event earlier this month, representatives from Nutmeg, Moo.la, The Wisdom Council and iShares reinforced the importance of the user experience as the era of digitalisation begins to sweep through the UK investment industry. 

The panel found that technology has created new, higher standards that people have come to expect as the norm. But, in many cases, the experience when investing and saving does not match these expectations.
 
“The growth of digital investing in the UK has largely been driven by the ‘advice gap’ created by changing regulation, which has left a large swathe of the population without financial guidance. An estimated 16 million people in the UK cannot afford financial advice with many more unwilling to pay for it for anything other than major life decisions.
 
Digital investing has become more prominent as consumers increasingly use technology to make critical decisions about long term savings and retirement. According to the BlackRock Investor Pulse survey (2016), half of the UK population surveyed use online sources and websites when making long-term savings and investment decisions. Digital solutions are often simple, intuitive, and have to have a key eye on cost, which has led some to build portfolios using exchange traded funds (ETFs).”
 
Anna Lane, CEO of The Wisdom Council, said: “This is about more than just millennials and robo-advice. The consumer may not really need or want to know whether it's an ETF or another instrument under the bonnet, but they definitely want to know that they are getting value for money and reaching their goals. Propositions that do not focus on helping people understand the importance of putting money to work, and establishing their trust, will risk losing out.”
 
Shaun Port, Chief Investment Officer at Nutmeg added: "We, as an industry, are only at the start of this journey. The trend is only going to skew further towards simple and efficient ways to save and invest. Building a service that people want to use requires a seamless experience, a solid investment proposition and robust infrastructure to provide investment services in an innovative and cost-effective way.”
 
Gemma Godfrey, Founder and CEO of Moo.la, commented: “People shouldn’t need a financial degree or be in the industry to put their money to work. It can often seem like the finance industry has deliberately overcomplicated investing, which only serves to alienate the very people they want to help. The power of a digital service is the ability to bypass the jargon and go straight to the heart of why we save and invest: for the peace of mind of knowing that we can afford real life events.”
 
Joe Parkin, Head of iShares UK Retail & Wealth Sales, concluded: “We’re only one percent done. In the future, what can be digitalised, will be digitalised. As the psychological and operational hurdles that have historically hindered choice and a smooth customer experience are lifted, digitally-driven investment will be the norm. The starting point is always the experience, and ETFs complement the need for accessible, clear and cost effective online solutions.”
 
The panellists highlighted catalysts that will likely further accelerate the digital revolution in the UK:
 
 
·         Payment Services Directive II, January 2018: A directive that will make customer data collected by banks more widely available to service providers for the first time. This is likely to open up the financial services to greater competition and equip digital solutions with valuable insight. With less information advantage, the customer interface and experience might well become the battleground.
 
 
 
·         Retail banking entrants: The emergence of digital investment solutions from UK high street names could build awareness about investing for the future, and raise customer expectations for money management for the better.

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