Right this moment, there are hundreds of millennials of growing means with smartphones in hand, looking up articles on investing, life insurance and other “adulting” matters, and weighing whether to test drive a robo-advisor.
What they are not likely to do at this moment is to call you – first, because we know from research they have an aversion to phone calls; and second, because they’ve never seen or heard from you on social media.
It’s ironic that in an industry built on relationships, we can’t figure out a way to communicate with an entire generation of customers. It’s an issue we can’t afford to ignore much longer: The oldest millennials turn 37 this year.
The direction our industry needs to move couldn’t be clearer. Eighty-five percent of millennials use social media, as do 75 percent of Generation X. For more than a third of them, it’s their primary source for news and information. When it comes to communicating, seven in 10 prefer to do it digitally rather than in person – mostly via texting.
This is a generation of people who would rather leave their wallets at home than forget their phones. Yet when it comes to harnessing the power of communicating through texting and social media, we’re not even close. Thirty-two percent of firms don’t use social media and among those that do, it’s only in a very limited “business card” capacity.
Our problem isn’t lack of awareness – I just made an argument you’ve heard many times before. It’s also not a lack of belief in the efficacy of the technology – I guarantee your sales and trading professionals are already using the platforms. What’s holding us back is our own refusal to embrace technology and commercialize our approach to compliance.
My firm, Compliance Risk Concepts (CRC), is now six years old. In that time, I’ve talked with hundreds of executives involved in compliance and risk management, from COOs in the largest firms to managing partners in the smallest, and in each case, the issue they’re struggling with is always the same. Behind closed doors, even executives from firms that publicly present themselves as technology-forward admit that, when it comes to compliance, we’re still in the dark ages.
The inability to move forward is costing more than missed sales with a technology-driven customer group. It’s also costing exorbitant amounts in lost productivity, as advisors and compliance staff hunt for and manually enter information across disparate data systems. And the cost to a firm when compliance professionals spend their time reviewing text and emails, rather than focusing on future risk and compliance issues, is incalculable.
The technology is here. Companies like Hearsay offer solutions that document and monitor regulatory compliance, freeing up highly paid professionals to spend their time instead in revenue-generating activities. Unlike its competitors, Hearsay’s products go beyond compliance retention and supervision to integrate with CRMs and provide business productivity tools that increase customer engagement, promote loyalty and ultimately enable agents and advisors to see more success.
The task at hand for risk and compliance professionals is to build a business case for embracing technology in their own organizations. At a time when fewer and fewer dollars are going toward compliance-related projects, we need to provide proof that leveraging technology to satisfy regulatory requirements will both save overhead and generate revenue.
This is the first of my monthly blogs for Hearsay. My goal over the next few months is to arm you with information and examples to help you build a successful business case. When it comes to leveraging technology, our industry has always lagged behind. We can’t afford to wait any longer; for the sake of our firms, it’s time to catch up.
Mitch Avnet is the CEO and Managing Partner at Compliance Risk Concepts. Mitch is responsible for business development, relationship management and overseeing the execution of all client driven / business focused Compliance related projects and strategic engagements.
Throughout the course of Mitch’s 25+year career in the financial services industry, he has worked for top-tier investment banks, commercial banks and hedge funds such as Wachovia Capital Markets, PNC Bank and D E Shaw, developing an extensive knowledge of both buy side and sell side businesses.
During this time frame, Mitch has served in a key leadership positions, building and integrating Compliance teams to be a meaningful and sought after component of the business process.
Mitch maintains the Series 4, 7, 9, 10, 24, 55, 63 securities license designations. He obtained his bachelor’s degree in economics, graduating magna cum laude from the State University of New York at Oneonta.