As we discussed in our introductory post, the Top 10 Technology Trends for advisors and their partners can be divided into three categories. The first of those, “Computing, Storage and Mobility,” encompasses trends one, Increasing Technology Capability and two, Mobility.
The two macro trends within this fundamental category affect everyone and every industry. They are not specific to the advisory space; they cut across both consumer and business IT.
The first trend, Increasing Technological Capability, underpins all the other trends that we’ll discuss in future posts. The concept of increasing technological capability covers a lot of territory and includes cheaper/faster storage, increasing processing power and increasing bandwidth/wireless speeds.
You may have heard of Gordon Moore’s Law, which in essence argues that processing power doubles every 18 months. There are corollaries both in terms of storage and networking speeds as well. In terms of storage, processing power and bandwidth, what was in the past potentially unaffordable or impractical is now becoming both practical and affordable. For example, 100 megabytes of storage cost more than $100 just a few years ago. Today, that same amount of storage can be found for free as a trade show give-away in the form of a logoed memory stick.
Wireless bandwidth speed are expanding even faster. Users are getting actual 12 Mbps speeds (+/-) on Verizon and 18 Mbps (+/-) on AT&T using LTE on the newest iPad. Cellular wireless speeds are 200-300 times better than they were in 2000.
One of the effects of those expanded capabilities is that financial institutions can store more data than ever before at a cost that simply wasn’t feasible in the past. The practical effect of that is financial institutions can use the extra data to ensure compliance with regulatory and legal requirements and store client and advisory data that was previously not retained. This will result in financial services companies investing more in ‘Business Intelligence’ to leverage this data in order to make better business decisions.
In addition, there are new platform-as-service capabilities that have emerged as a result of these developments. We’ll talk more about them in an upcoming post about cloud computing. Cloud computing is more viable today, and is the most rapidly growing segment of the software industry, because of these trends.
If these trends continue at the pace that we’ve seen over the last five years— which we predict it will—then advisors and firms can expect an entirely new range of computer infrastructure management options that will open up capabilities that no one has yet thought about. Advisors will be able to leverage these capabilities and have access to enterprise-class computing capability that was previously unaffordable at the practice level. This will also result in increasing outsourcing of computing infrastructure to companies that provide this capability.
In the current environment of increased computing power, cheaper storage and faster network speed, firms should be thinking about what they can do to improve the quality of the client experience, make the underlying economics of the business more profitable and ensure compliance with all of the appropriate regulatory and legal requirements.
The macro future trend lies in thinking about how you can do those three things at once, now that you have access to a level of computing power that simply wasn’t previously available at affordable prices.
We welcome your thoughts and suggestions along the way as everyone has a different perspective and set of experiences. Please e-mail [email protected] with thoughts or comments and we will do our best to address them in upcoming blogs.
View Spenser Segal’s previous practice management primer blog series.