With advisers holding sensitive data as well as increasing regulation around the security of customer data and communicating breaches, maintaining data security will remain a growing priority and focus.
According to the 2016 Ponemon Institute Cost of Data Breach study, the average cost of data breach to a company is $A2.64 million, with the biggest consequence of data breach being lost business.
The 2016 Ponemon Institute Data Protection Benchmark Study showed organisations around the world deal with an average of 20 data loss incidents every day.
Advisers will need to implement robust procedures and processes around data security, while at the same time keep up with changing regulations to adequately manage data security risk.
This may involve assessing where critical data is stored in regard to security, reliability and accessibility and whether it’s stored in data centres or on-site servers.
Roboadvisers have had a contentious start in Australia, though they’re unlikely to fade away as technology advances. In fact, according to BI Intelligence, it is predicted by 2020 roboadvisers will manage around 10 per cent of the total global assets under management, equating to around $A8 trillion.
Roboadvisers are likely to become more adaptive and intelligent and put pressure on the traditional role of advisers and fund managers, although not completely replace them.
While startups will gain ground, it will also be the large incumbent firms that will embrace this technology and launch their own products.
Today consumers have access to almost the same information as advisers, and in real-time from almost anywhere.
For instance, according to the Australian Prudential Regulation Authority and the Australian Tax Office, there are close to 600,000 self-managed super funds (SMSFs) in operation, managing $A653.8 billion in assets, with thousands of new SMSFs being established every quarter.
No longer are investors bound to advisers for financial information as they once were and do-it-yourself investing is becoming more popular.
This means advisers have to continue to add value by providing expert analysis and advice.
Like many other industries, financial advice and planning is being disrupted by technology at an increasing pace.
These are just some of the ways advancing technology is likely to impact the finance sector. It is certainly a space to pay attention to.
Andrew Tucker is CEO of ITonCloud which offers cloud-based virtual managed desktops for business