Five digital tools to enhance your cash management advice

In today’s digital age, the demand for round-the-clock access to innovative solutions has surged, especially from a new generation of investors looking for fast and straightforward control over their finances. As technology advances, it’s crucial advisers stay on top of the latest trends and tools shaping cash management to ensure an outstanding client experience.

The changing financial landscape

High interest rates and inflation have brought cash savings into sharp focus. In tough economic times, it’s essential to adopt a proactive cash management strategy that maximises returns, protects against inflation and ensures security. 

Clients also now expect 24/7 access and control over their finances, driving the adoption of digital platforms, mobile apps, and the expertise of dynamic FinTech companies.

This shift has seen advisers embrace innovative cash management technologies offering increased efficiency, personalisation, and data-driven insights. In fact, according to FE fundinfo’s 2022 adviser survey, 69% of advisers spent more on tech, and 38% invested in tech and software solutions for the first time in the previous 12 months.

Here are five digital tools worth thinking about.

Digital tools for enhanced cash management services

1. Cash deposit platform

A cash deposit platform is an online hub that brings a wide range of savings accounts from different banks and building societies together in one place. It acts as a one-stop shop for managing cash, and typically offers several benefits, including higher interest rates, the opportunity to spread funds and extra financial protection under FSCS.

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Flagstone’s cash deposit platform offers you and your clients 24/7 access to hundreds of bank accounts, including market-leading and exclusive interest rates, from a single Flagstone account. Your clients can manage their money, and deposit, transfer or withdraw cash at any time.

As an adviser, you get complete visibility of your clients’ cash portfolio, so you can monitor their investments in real time and provide personalised advice. Regular alerts highlight maturing accounts or new products for those (re)investment conversations.

2. Cash flow forecasting and budgeting

The most popular adviser technology is cashflow modelling with 84% of advisers saying they already have it in place. If you’re missing out, cashflow tools can analyse data from bank accounts, bills and other income sources to provide real-time cash flow analysis and savings goals tracking to help you create personalised cash flow forecasts.

You also use them to identify patterns and forecast future cash needs, so you can make data-driven recommendations on spending or investments.

3. Open Banking

With Open Banking APIs, you can securely access your clients’ bank accounts for a complete view of their financial situation. This financial software acts like a bridge, giving you the opportunity to start (re)investment conversations and make their money work harder.

4. Predictive analytics and scenario planning

Machine-learning models can predict future cash needs and market fluctuations, allowing you to proactively manage potential shortfalls, protect your clients from emergencies, and suggest investment and saving opportunities.

5. RegTech

While adopting digital tools can bring several benefits, always keep compliance and data security in mind. Make sure you have robust cybersecurity measures in place to prevent cybercrime or data loss, and ensure you comply with data protection laws like GDPR, anti-money-laundering, or Know Your Customer (KYC).

With financial regulations constantly changing, it’s worth considering regulatory technology (RegTech) tools to help you stay informed and compliant. Risk management software can automate compliance monitoring, while reporting tools can save time, and reduce the risk of fines or other penalties.

Benefits and challenges of cash management tools

Cash management tech offers several benefits, including:

• Time savings and efficiency. Automation frees you to work on high-value activities, manage your clients more effectively, and boost profitability.
• Improved client relationships. Greater transparency and interaction build engagement, trust, and satisfaction.
• Enhanced accuracy and reduced risks. Automation reduces human error and improves regulatory compliance.
• Data-driven insights. Real-time analytics and historical data provide valuable insights for informed decision-making.
• Closing the advice gap. The cost of living crisis and squeeze on finances mean some people are missing out on expert financial advice. Tech can help them access instant advice with your backup, where needed, so clients of all types can maximise their interest income.

However, there are some challenges to think about:

• Resistance to change and initial costs. Implementing new technologies often requires upfront investment and your clients – or even you – may be resistant to change.
• Ethical considerations around AI. Some AI is getting bad press in the media, and clients may have concerns about using AI in decisions about their cash funds.
• Cybersecurity concerns. As reliance on technology grows, robust cybersecurity measures are crucial to protect client data and prevent fraud.
• Client education and communication. Clients may need clear explanations and ongoing support to fully understand and support new technologies.

To sum up, digital cash management tools are no longer optional, but essential for advisers to thrive, unlocking efficiencies, enhancing client service, and navigating evolving regulations. The key is seamlessly blending technology's power with the human touch.

Advisers who master this art to deliver personalised, client-centric experiences through a hybrid approach can set themselves apart as future leaders – and create sustainable success for themselves and their clients.