John Drosos: What do we expect for 2023? There are definitely some challenges out there, but what are we seeing specifically in the financial services space? Frankly, from my perspective, we continue to see growth. We continue to see opportunity despite some challenges.
Announcer: It’s time for another episode of the Alexander Group Revenue Growth Model Podcast. Welcome, and enjoy.
Thank you for joining us today. I’m John Drosos, a principal with the Alexander Group and a co-lead of our financial and business services practice.
All right. So, 2022 is behind us. Very unpredictable year, as recently, at least in the last three or four years, I would say. So, what do we expect for 2023? There are definitely some challenges out there, but what are we seeing specifically in the financial services space?
So, number one – everything tech is going to continue to drive growth and disruption. You may see that some tech stocks are beat up now. There are questions about what technology can I use. Should I really get on board with this tech or that tech? Rest assured, established companies need to respond to the tech challenges out there to investment in variety of tech applications or risk significant inefficiencies at best. At worst, you can be disintermediated. You can find that, “hey, your business model is gone” if you don’t get on board. So, what are we talking about? Payments technology. We’re talking about insurance technology. We’re talking about sales technology to make your sales force more effective. We’re talking about marketing tech and marketing automation and very importantly, service tech, especially if you’re servicing millions of customers out there, you’ve got to get more efficient at it. You’ve got to get better at it. You have to get more responsive.
Number two – if we look specifically at some subsectors in the financial services space, insurers are seeing some clear channel shift and some clear challenges. We did an extensive amount of research. We spoke to a number of leaders and carriers this year, and a few things are happening that you need to respond to if you are in the insurance space. One, employee-led and call center sales models are going to stagnate a bit and potentially decline. We heard this from a lot of leaders and there are some real cost pressures in there and there’s some technology that’s also driving this. You have to respond, especially if this is your model today. As a subset of this, online mobile sales will continue to grow rapidly. So, we ask the question, “hey, how much more can mobile grow?”; mobile and online are going to continue to take share in the insurance market. The answer we heard loud and clear, and then we see out there, yet it will continue to grow. More and more people are getting comfortable buying more and more complex policies online. So, you have to get on board and have an online mobile strategy. Pretty much every carrier out there needs to be investing in this channel. Last piece, brokers and independent agents are going to continue to get stronger and more sophisticated. This channel has been pretty resilient, and our research shows that leaders out there in carriers really value the independent sales channel. So, a lot of actions with independent agents and brokers and a lot of action with online selling models.
Number three prediction. So, this is probably some good news and some bad news. There should be some respite in the sales talent wars. In the last couple of years, last year in particular, we’ve seen a huge demand for talent. You need talent for selling more advanced solutions, services, new technologies, and it’s been tough to get. That’s going to ease up a bit. Part of the positives that we’re seeing a little bit of weakness here on with some financial services firms and we’re seeing a little bit of weakness in the tech sector. That means good opportunity for other players and they’re good opportunity to pick up talent that knows how to sell all the technology we mentioned earlier and also broader financial services and more innovative types of solutions that customers are demanding.
So, those are the big three everything tech. And you’ve got to get on board. You got to invest on the insurance side. We are seeing some big channel shifts that you’ve got to be prepared for those. And then more broadly, for everyone in financial services, this is a good opportunity to get that talent you’ve been looking for for the last couple of years. If you would like to learn more, please visit us at www.AlexanderGroup.com.
