The SAMR model – with SAMR standing for ‘Substitution’, ‘Augmentation’, ‘Modification’ and ‘Redefinition’ – is a framework established by Dr Ruben Puentedura, which serves to categorise and help educators think about how technology is more effectively applied in the classroom.
Puentedura puts forward that when moving to an online format, teachers typically focus on the first two ‘levels’; substitution and modification, where traditional learning methods are simply replaced with their digital equivalent. By way of example, a laptop may substitute a paper notebook, with the learner typing up their essay on their device before submitting it via email to their professor.
He postulates that for genuine transformation to take place, educators need to move beyond simple substitution and modification to augmentation and redefinition; where technology facilitates the redesign or reinvention of the task, allowing for the creation of methods that were previously inconceivable. A learner who creates a historical documentary on their cellphone that answers key questions on World War II by interviewing survivors – instead of simply submitting an essay on the topic – would be an example of learning redefinition through technology.
While intended to be applied to a learning environment, the SAMR model could, in fact, apply to many spheres and industries, including financial services. We are still in the very early phases of seeing ‘digitise’ – converting information or documentation into a digital format – move to ‘digitalise’ – which is changing existing business models through a technology-based lens – but there is potential for technology to add immense value to our clients.
There’s no getting away from the fact that the financial services industry, in general, moves with the inherent speed of a cold-based glacier. The flip side of years spent designing processes, products and protocols that serve to protect both client and provider is that our pivoting looks more like a very slow pirouette. Large corporates, in particular, are a big ship to move. The plethora of necessary legal systems tends to make the adoption of new technologies a tedious process, which, in turn, slows down digital transformation.
If we were to look at Dr Puentedura’s model, currently the vast majority of local industry practises would sit squarely in the substitution or modification space.
Having said that, there are those who are disrupting the global industry in a good way – and these tend to be more in the fintech and insurtech start-up arenas. United Kingdom (UK)-based company, Digital Fineprint, offers a data sourcing platform that provides insurers with granular insights on small medium enterprises (SME) that they would normally find difficult, laborious and expensive to acquire – and thus insure. ‘DeadHappy’, a UK insurer with more than a touch of gallows humour in its name, is another case study in successful disruption, providing digitally-driven, pay-as-you-go life, flexible life insurance policies to its customers.
Closer to home, Consult recently launched a first-of-its-kind short-term insurance application for clients, which is fully intermediated.
However, first things first. Before we, as South African financial services, can successfully embark on the road towards digitalising, we need to complete the journey to effectively digitising; a necessary first step that will allow us to get there quicker and with less effort. Bear in mind that digital disruption – generally a short-term exercise – has the potential to pose a significant threat to an existing business model while simple digitisation, also a short-term goal, is low risk and has the potential to add significant value to a business. True digital transformation should be viewed as a longer-term (5 – 10+ years) objective, wherein lies its true potential to add immense value to all stakeholders.
I believe there is great opportunity that will arise from getting to know our clients more intimately. Through big data and machine learning, we now have more avenues to information that will help us to better understand our clients and how we service them. Armed with these insights, we can hyper-personalise our advice. For example, financial success might look different to someone who lives in Joburg versus a Capetonian. We might want to present information differently to an engineer than say an accountant, or an artist, in a way that will best resonate with each as an individual. When we know our clients better, we can tailor our offerings in ways that add more value to them.
In the redefinition space, which could be in the not-too-distant future, we may see more holistic financial plans that collate all of a client’s personal and financial detail – their bank account transactions, various policies and properties, behavioural data and personal goals – in one place. A living platform that tracks progress in real-time and is integrated into a bigger eco-system. If you veer off course, a financial adviser would give you a ring to guide you in getting back on track and closer to your financial goals.
What is for certain is that the role of a trusted financial adviser can never be substituted. Financial advice is a relationship and trust game. However, where automation can add value is in creating consistency in service and ensuring compliance. Says one paper, “…trend reshaping advisor technology is the growing focus on back-office automation, as it becomes increasingly clear that “robo-advisors” were never a threat to real financial advisors…but the efficiencies they bring are highly relevant to enhancing the productivity of human advisory firms! Which is driving a new wave of investments into both business process automation systems, and more generally anything that can improve the expediency of back-office workflows (from ‘simple’ client note-taking to more complex multi-system workflows), along with greater automation of compliance technology in particular.”
Ultimately, I believe that any attempt at innovation should always begin with an intense focus on your customer. In more deeply understanding them, the ways in which you can add value to their lives will become clearer. And the technology that enables this, will follow.