Some trends and products that Joel sees emerging in the coming year.
As readers of my columns are no doubt aware, I write a year in review column regularly, but I usually shy away from making predictions at the beginning of the year. That's because I do not have a crystal ball, nor do I have any particular confidence in my personal ability to predict the future. Having dispensed with the disclaimer, I can tell you that I've received numerous calls and e-mails over the past month asking me to highlight some technology trends I see emerging in 2008, so I decided to take a chance and share 10 predictions with you.
Document Management 2.0
2008 will be the year that more robust, sophisticated document management software products begin to really take off within the financial advisor community. A few short years ago, paperless office technologies and digital documents were considered bleeding-edge technologies by most mainstream advisors, but these days most advisory firms use paperless office technologies to some extent. One would think that by this time virtually every firm in the industry has deployed document storage software, but apparently, this is not the case.
According to a recent survey by Financial Planning magazine, 38% of respondents said they did not use any document storage software at all. Of those respondents who did say they used a document storage solution, 32% said they relied solely on Adobe Acrobat, while another 9% used PaperPort.
Because of a number of factors I discussed in an article titled File Trials, I do not believe that Adobe Acrobat or PaperPort alone can address the needs of today's financial advisory firm. So (if we use the Financial Planning survey as a benchmark) although roughly 62% of advisors are using some form of document management software, only about 20% are using a system that is likely to be adequate, let alone optimal.
I believe this sorry state of affairs is about to change. Historically, with the possible exception of Laserfiche, firms that market document management software to advisors have not done a particularly effective job of educating advisors as to the finer points of their products. As a result, advisors think "Hey, I already have a paperless solution, so I must be OK." Here's a newsflash: They are not OK!
It is highly likely vendors in this niche will redouble their educational efforts in 2008, and when they do, an awareness of legal, regulatory and security concerns will cause advisors to re-examine their current document management tools, or lack thereof. Upon examination, many advisory firms will find their current systems lacking. This will cause them to turn to products from firms such as Cabinet NG, CEO Image Systems, DocuXplorer, LaserFiche, Xerox, Worldox, and others. These firms can provide more automation, built in workflow processing, improved indexing, robust search capabilities, granular rights management, and audit trails, plus numerous other advanced features.
If all the leading document-management firms serving advisors traded publicly and I could buy an ETF representing a basket of them, I'd be long the index. These firms are poised to prosper as advisors move to improve their document-management capabilities.
The issue of document authentication is closely related to the whole area of document management, but it is a separate challenge worthy of its own discussion. As it relates specifically to digital documents and records, the issue is this: A client signs a contract, or any other document. You scan the document and save it as a digital file. At a later date, you produce the document to settle a dispute, satisfy a regulatory request, or support your case in a court of law. How do you prove that the digital image is authentic? How can you demonstrate that it has not been tampered with?