As South Africa’s financial services industry evolves, technology is no longer just an enhancement but a necessity for scalability.
According to Jeanette Marais (pictured), the chief executive of Momentum, the future of financial advice will hinge on leveraging digital tools to meet growing client demands while maintaining the crucial human connection that sets advisers apart.
“AI can really help us to better understand our clients. And the real value of AI comes when machine intelligence meets human heart,” Marais said at the PSG Financial Services Annual Conference.
Digital fluency doesn’t always translate into financial literacy
South Africans are underinsured by at least R2.4 million per income earner, according to a 2022 study by the Association for Savings and Investment South Africa. Despite these challenges, South Africans remain deeply aspirational.
Financial advisers, said Marais, have a crucial role to play in turning these dreams into reality. But to do so effectively, they must understand both the client of today and the one emerging tomorrow.
South Africa’s financial landscape spans affluent professionals and informal earners, Baby Boomers, and Gen Z. Marais noted that the diversity in income, culture, and financial needs means a one-size-fits-all approach won’t work.
“There is no such thing as an average South African client,” she said.
Gen Z, in particular, is shaping the future of financial advice. Marais said these digital natives are tech-savvy and curious about AI, and many are already transacting via mobile apps – a trend South Africans adopted earlier than many others globally.
But digital fluency doesn’t always translate into financial literacy. Momentum’s financial wellness study revealed that only 20% of South Africans are financially literate. Global studies suggest a slightly higher figure – around 30% – putting South Africa on par with other BRICS nations.
Even among households earning more than R125 000 a month, only 31% are fully financially literate.
Only 8% to 9% of South African households use financial advisers. Most people still rely on themselves or informal networks such as family and friends.
Yet, Marais remains optimistic: “I’m telling you what an amazing opportunity still exists for financial advice in South Africa.”
The real challenge, she says, is for advisers to merge smart technology with empathy, providing tailored guidance that reflects each client’s unique context.
Tech-enabled advice is the future – and the only way to scale
Marais noted that financial advice in South Africa faces a scalability challenge, and technology is the only viable path forward. She urged financial advisers to embrace innovation to stay relevant and meet rising client expectations.
“We, as financial services companies… must embrace technology to keep up with the needs of our clients,” she said. “And you, as financial advisers, must look to partner with firms who use technology to make your lives easier, to deliver better on you and your clients’ needs – but more importantly, to help you scale advice so that you can access these clients who are actually in desperate need of financial advice.”
Today’s clients expect accessibility, speed, choice, and personalisation, which in future, “will be impossible to deliver or to scale without the help of AI”, Marais said.
Momentum has already introduced tools such as FastTrack, a fully digital onboarding and underwriting system for its Myriad life insurance product. In 2022, it launched LifeReturns, which uses photoplethysmography (PPG) technology to assess a client’s health through a short “selfie” video. Combined with a few basic questions, clients can receive premium discounts and, if no major risks are detected, obtain near-instant approval through FastTrack.
Read: Embracing AI in insurance: the path to innovation and survival
“It’s just a start, but it’s a world-first technology, and it will help us to move forward at great speed,” Marais said. “The challenge for us as organisations now is to think – where else can we use that?”
Beyond underwriting, Marais pointed out that technology can make advice more affordable and accessible.
“It’s like robo advice for advisers,” she said. “We know that robo advice never really worked in the space out there to attract clients or to actually take your jobs away, but robo advice in a different form can help you to deliver an excellent service to your clients – and help you to do that at scale.”
AI should free humans to be more human
Although artificial intelligence is often seen as a threat to jobs, Marais sees it as a tool to enhance empathy and improve client service in financial advice.
“It is said that AI will take away jobs from people who work with their hands,” she told advisers. “But I believe that AI will give better tools to people working with their heads, and this is a space that you run.”
Instead of replacing people, AI should take over repetitive tasks, so employees can focus on meaningful client interactions.
“Right now, we force our service and administration employees to do robotic work,” Marais said. “Then the next moment, the phone rings, and we expect them to switch context completely… Why don’t we rather get machines to do the more robotic work, which will free up the human to have more time to build connections with our clients?”
Momentum is testing an AI-powered empathy tracker that monitors service calls and emails, flagging interactions where empathy may have been lacking. This allows the company to follow up with clients and correct service missteps. “Imagine the surprise of a client… where we can phone you afterwards and say we picked up something in a call and we think we didn’t do well. How can we help? How can we fix this?”
Marais also previewed a new initiative in development: the Certified Behavioural Advisor, which will equip financial advisers with behavioural science tools. By partnering with the Global Association of Applied Behavioural Scientists, advisers will gain access to global research on human psychology and its impact on financial decision-making.
This tool uses more than 20 million data points daily to track client behaviour and predict emotionally driven decisions.
“This is something that I’m extremely excited about,” she said. “We will soon start to test and pilot it internally… so that we can help you to proactively help clients not to switch and not to lose money through emotional behaviour.”
AI revolutionising retirement planning and client relationships
Marais noted that AI is playing an increasingly important role in transforming retirement planning – particularly through its ability to predict a client’s life expectancy.
“The biggest predictor of post-retirement longevity in our actuarial assumptions is BMI,” said Marais. By leveraging digital underwriting systems such as FastTrack, the company can now provide financial advisers with life expectancy predictions, helping them to plan more effectively for their clients’ retirement years.
Another example of how retirement planning is changing: research has shown that loneliness in retirement has a similar impact on health as smoking 15 cigarettes a day, increasing the risk of premature death by 29%. This highlights the need for a new type of retirement planning – what Marais terms social capital retirement planning.
“How will your clients’ lives be meaningful in retirement, and what resources will they need to satisfy this?” Marais asks. It’s a crucial question, because financial planning increasingly needs to address the social and emotional aspects of retirement.
Marais explains how AI can surface patterns and predict client needs before they are even voiced.
“Imagine how AI can help us personalise at scale and drastically remove our admin time.”
This, she said, would allow advisers to spend more time on the most impactful aspect of their role: being a behavioural coach, ultimately improving their clients’ financial well-being far more than the plan itself.
The value of human connection in a digital world
As technology continues to advance, Marais noted that certain elements will remain unchanged: “Humans will never want less empathy. Humans will never want less of a relationship, particularly when it is about complex matters, where the stakes are high.”
She underscored that although digital tools are becoming more essential, it’s the human element that sets financial advisers apart.
“As a species, we are not comfortable to take high stakes advice from a machine. We trust humans, because we trust relationships,” she explained.
The future, she believes, isn’t just digital; it’s “deeply human”.
“Clients will expect digital ease. They will want smart tools, and we will give it to them, but what they remember and what they’ll come back for is how you made them feel and how you help them to build and protect their unique financial dreams,” Marais asserts. “And that is why I can say with confidence that you, as advisers, will matter more than ever.”
