In 1983, Motorolla released the Motorolla DynaTAC 8000X. On the market for $4000, It was the first commercial mobile phone and offered a mere 30 minutes of talk time. Fast forward a few decades, and smartphones are more common than toilets (this is true: more people in the word have phones than toilets). A stark contrast to 30 minutes of daily talk time, today, the average person unlocks his or her cell phone 110 times per day.
So what happened over the course of 35 years to completely change the way we interact with our phones? Technology advanced, and cell phones became smaller, faster, cheaper and more capable. But, another important shift occurred. Some companies began to view the phone as a platform, versus a product, and the entire future of the cell phone changed.
Instead of designing the phone to make verbal communication easier, these innovators began looking at the device as a platform for a wide variety of activities. And it worked. Today, we use our phones for way more than talking. In fact, that’s probably one of the least used functions of the phone for younger generations. We use it to text, email, play games, track our fitness, navigate to new destinations, and so much more.
Even though it’s fascinating, this blog post isn’t about the history of mobile phones. It’s about the difference between platforms and products, and the reasons why it’s important to look at technology with a wider lens. We will explore the history of annuity maintenance and share the reasons why a platform approach to annuity maintenance makes so much more sense than a product approach.
Solving Business Problems
Typically, organizations look to products to solve various business problems. Even though the given product will likely suffice for a while, the original problem will eventually evolve. But the product won’t. And so, over time the product becomes obsolete.
Shifting Regulatory Environment
Another area this comes into play, especially for the annuities space, is the regulatory environment. It’s no secret that the regulations and compliance landscape for the financial services and insurance industry are constantly changing. And as they change, firms need a way to ensure they remain in compliance.
A recent example of this is the pending DOL Fiduciary Rule. Under the originally passed version of the rule, broker-dealers officially became fiduciaries for their clients. Now, when clients want to make changes, reinvest or withdraw money, broker-dealers can’t just pass them on to the insurance carrier. Broker dealers (and carriers) need a platform that allows the advisor to initiate and track the progress of requests even as it moves on to other parties. A platform—with auditing and disclosure creation capabilities—would bring control back to the BD and increase transparency across stakeholders.
The Future for Annuity Maintenance
Even though the future of the Fiduciary Rule is uncertain, it’s clear that there is a need for automated annuity maintenance. Automation brings great benefits to BDs, carriers and end customers. For broker-dealers, it brings control, transparency and the ability to better serve customers. Carriers save money and time by automating transactions. And, end customers benefit greatly because streamlined processes result in better customer experiences.
Trying It All Together
Remember the cell phone example at the beginning of this post? Well, cell phones and annuity maintenance have much more in common than you might think. Just as Apple and other innovators began to look beyond the limited function of the first cell phones, a shift is happening in annuity maintenance. The original annuity maintenance products on the market—the ones that you’re probably familiar with—view annuity maintenance with a very limited lens. Sure, they can automate annuity transactions, but they don’t do much to transform or improve the annuity maintenance process. IFS was founded to provide innovative platforms for the financial services industry, and the annuities industry will soon begin to reap the benefits.
We are excited to be a part of this story. We are launching Annuva, our annuity maintenance platform, later this year. We are confident that Annuva will change the way firms approach annuity maintenance. As a true platform, it’s built to adapt as the industry and market do. It’s also designed to adapt with your organization. Whether you’re a broker-dealer or carrier, your annuity maintenance needs will change over time. Annuva will give you a cost-effective, sustainable platform to solve your annuity maintenance problems over time.
To schedule a demo or learn more, contact us today.