In episode 2 of our Sense of Identity Podcast, I chatted with Chris Read from Dunstan Thomas about how to engage clients in a Tik Tok era.
Dunstan Thomas provides a whole ream of interesting technologies to the financial services sector, investment, savings, retirement... the list goes on. This has gained Chris a unique view of digital transformation that spans the market.
Chris is not only the founder of Dunstan Thomas and a thought leader on all things financial services tech, but he also started The Singing Gorilla Project in Uganda, helping to improve the welfare of remote communities in the country.
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A Witness To Change
Welcome to Chris Read, founder of Dunstan Thomas.
For me, a fascinating theme is around the type of kit you provide to your customers.
By its nature, it has to account for a very broad demographic of individuals, and I'm intrigued by how it is that you ensure that no one's excluded through that technology. – because, of course, what works one for one demographic may not work for another.
Well, traditionally Dunstan Thomas has created kit that we've sold onto the manufacturing end of the market, so you know, the providers.
And in the past, of course, that key market space was through advice.
So we didn't have to worry too much in days gone by in terms of usability.
They would simply provide spec and we would deliver against it.
We got the financial service marketplace in 1996 through a relationship with James Hay and it wasn't really until the 2000s that digital became more part of not only the adviser toolkit but also the consumer toolkit.
More recently, though we've found that although our customers haven't changed (we're still selling onto the platforms and the providers and the manufacturers), we need to account much more for direct consumer capabilities.
And so I think we're all on a bit of a learning curve because everybody is trying to figure out how best to engage with people at that consumer level.
I always find that you know, if you put yourself in the shoes of the consumer, just as you have to do when you buy an airline ticket or a hotel or whatever, that’s not a bad place to start.
With the companies that you work with, you guys have got a massive experience across a lot of different engagements.
Do you think financial services has been less than willing or receptive to input from people that probably understand tech better than they do, or has that changed?
I suppose there are two angles to that question - number one, do they listen?
Actually yes. Now they do because I think we've earned the right to because we've just been around the block enough times.
But there's another part of the question - has the financial services marketplace been a laggard in development?
And in some ways, I think what they've done is they've tried to follow the money - and the money is with the generations of my age.
I think what they've done is they've configured their propositions to serve people like me rather than people like my children.
So consequently, the evolution of digital within our marketplace has gone at the pace I'm prepared to accept.
So, I think by design, financial services have been kind of slow in digital development.
Battling Digital Resistance
That's interesting in the context of the piece you published about digital resistance - I think it was baby boomers that you were focusing on there.
Certainly, COVID has shifted the dynamic a bit and I'm probably not the only one that's seeing their parents, my mum in my case, being more willing to take on board Facetime and video conferencing because they sort of had to.
The percentage of people that have got smartphones in that particular demographic is probably a lot higher than we would all have expected.
So, on that resistance piece concerning financial services tech - do you think that's changed as a consequence of COVID?
I think COVID has been a liberator in some ways, in the adoption of things like Facetime.
I'm quite surprised because the generations seem to have skipped steps, so for example, I've got an aged aunt-in-law in her mid-eighties and she can't do emails but she can do Facetime.
So, it's like she's skipped a technology surge and she's got straight to the next one.
That shift, and let's say that jump maybe then, for the baby boomer – in what ways do you see that has turned more people toward digital solutions?
Well, certainly I think online banking has been something which has changed people's behaviour.
People of our generation are online all the time. So, that's been at the forefront insofar as tools are concerned.
I spent the weekend sort of just trawling the internet, looking at some retirement tools just for a little bit of market information.
I had a look at the abrdn tool – it’s really interesting that one because you fill it out and then you get bombarded with text messages and WhatsApp and it's like, oh?
I think my reaction to it was, well “all I wanted to do was to play with the tool”.
I didn't want to be sold at that stage.
Then I had a look at another one by a startup called Guide and had a play with that.
In contrast, they haven't followed through with like an inundation of sales activity.
So, I think one of the things that I've noticed in my behaviour at least, is that I'm quite prepared to go and use the tools but I'm not prepared to transact (using digital tools).
With airline tickets - I'm prepared to use the tools, prepared to transact.
I think the open banking side of things is still a bit of a marmite subject - you either love it or hate the idea of someone being able to give you more information by digging further into yours.
It makes sense, to evaluate what's in your account and what you're spending money on, but it will take time to build trust in it for everyone.
I think it’s such a positive outcome.
To have more information and be able to link that so that you can get in front of decision-making and offer customers the right options, I think is a good thing.
I can understand why people would also find it intrusive and obnoxious and say well “hang on a sec, who do you think you are trying to get in front of me, Mr Digital?”
But I think it's a bit like the sort of Minority Report thing, isn't it? You know the movie where you can get in front of that decision to commit a crime.
So, the idea of getting in front of that decision to make it more informed is cool.
You can only do that if you start to connect stuff and understand it.
I mean, in some of the stuff you're doing on Nigel, for instance.
That’s a perfect example of that digital vault market where you've got Legado and folks like that.
- being able to capture all that digital information so you can create those correlations and connections, then starting to get in front of people to say, “actually, do you know what, here's a set of options for you”.
Influences On Clients
We’re talking about things that perhaps my sons might be more receptive to than our peers.
I’d say that their willingness to share data to get something back is probably greater than perhaps for my mum, for instance.
But I think that's changing. What about the future, do you think? Do you think people are gradually becoming more willing to use digital?
I mean, I think it's a really interesting question and I think parents have got a lot to answer here.
I've asked my son, who's twenty-four to make contact with my IFA to set up an ISA.
So, he's been sending the adviser emails asking to connect.
It is unlikely that I think my son now will transact digitally in FS.
I think I've steered him into, for better or for worse, waiting for somebody else to come back to him and doing it through advice.
And so, I think parental influence is important, that sort of peer influence too.
You go to the pub and someone says, “oh go and buy gold”.
Guess what, I'm going to buy some gold (or go and put money on the horses or whatever it is).
I think that influence has got a lot to do with digital adoption as well, but I don't know how you'd measure that and how you bring it into tech thinking, you know.
Whilst it might be a little bit jovial, I mean, that's real life, isn't it? That's how people make calls on things – again, for better or worse.
I think it does feel it does feel now that the balance of benefit has flipped, there are gains to be made if you're willing to be more digital when it comes to financial services.
I guess that's why this whole question about how you try and arm everybody, irrespective of their age, with what they are prepared to do digitally, is so important.
You want to try and give them the economies associated with it, the speed of it, maybe the security of it (if they're doing the right things) and reap all the benefits.
Progress Through Recession
Looking back at what we've all been through over the last six years - Brexit, COVID, then the current political turmoil - how pivotal do you think it's going to be for technology to help us weather this recession?
I mean, we've been around since 1986 and so we've seen about four recessions.
I think the last one was in 2011/12 and before that it was around 2000 - you know the whole dot com boom thing.
You know, so, they come and go every seven years or so you know in a cycle.
The behaviour of Dunstan Thomas has been a reaction to our clients.
Decision-making for buying stuff tends to be slower in a recession and so what we've always done is we've revved the products and tended not to reduce the sizes of the teams - knowing that we're probably going to get through the cycle within 12 to 24 months.
By the time we come to the end of that cycle, we want to ensure that the products have gone through some sort of redevelopment cycle, and we'll get rid of that technical debt.
See, our first product came out in 1998 you know, it was a visual basic system on a DBase database, it was crazy old stuff.
Now, that product is still in the market, clearly not with the same technology.
But I think that it's probably been about four different iterations and just redeveloping that tech debt to keep it going. Any technology business has to be aware that as soon as they start developing they are investing in their technical debt.
These are the times when we start to do that.
I guess the interesting thing for me is that the peaks and troughs of those other recession periods – it seems this time that we've got a trough that's been there longer, whether it's just emotionally or as it you know, from a market perspective.
I just wonder how much technology can help that trough rise again.
So, I think that there are a couple of things.
One- is we always think that we live in exceptional times, you know, so I don't think I've ever heard of a time when it's not been exceptional.
We’ve come out of a period of very, very low-interest rates.
When the business first started in 1986, interest rates were over 10%.
It was quite normal, you know, so the fact that we've come out of a period of very low-interest rates in some ways makes me feel the recession that we're in isn't as bad as previous ones.
Two- I think it's just that we're coupled with a European war at the moment, which is the elephant in the room because there's an emotional part of that as well as how it affects the markets.
But you know, I've got faith in the momentum of markets and I suspect they will turn, you know, as they always have?
And how does digital play into that?
Well clearly, any time that you can deliver new ways of doing things or creating efficiencies, you're going to be quids in, especially as you're coming out of a recession.
Yeah, it does always feel in a way that you've got to stand against the trends and keep banging the drum because the FS market's not renowned for building things quickly.
Well, that's because they're following the money.
The recipients of you know, of the digital, aren't, you know, pushing back on them.
The Future Of Client Engagement
Now, through your whole tenure and to use that right word at Dunstan Thomas, you've been a frontrunner on thinking about this stuff and every time we catch up, we talk about where we think the world's leading to in these things.
Have you got any views, or visions around how you see things over the next five years?
Is there anything in your mind that stands out that's going to shift the market or shift people's thinking?
Oh, really, I suppose you could answer that really in all sorts of ways, from a geopolitical perspective down to, you know, what's around the corner in new products.
So, I suppose if we focus on financial services, I think I think we're in a kind of period now where interest rates are rising, and guaranteed income is getting more attractive.
Guarantees do better in higher-interest environments.
So, I suspect we're going to see more sophistication in retirement propositions.
You know, those that mix, and blend guarantees with drawdown and that kind of thing?
I think we're starting to see that there are a few platforms which are already starting to offer them- the herd hasn't moved yet, although there are some big players now starting to talk about these, these things.
And so, I think that something that's going to happen.
It also feels when there's a prolonged period of uncertainty and interest rates rise, annuitization becomes a much better angle from a guarantees perspective.
For instance, you could buy an annuity with interest rates at 8% - now that's not bad.
Financial Services Community
Moving onto Chris rather than just the FS market as a whole, what advice would you give someone based on your experience, if they were just starting out?
I'll use a little bit of Latin for this.
So it's um Per Manendo Vincimus, alright - so Per Manendo Vincimus means through perseverance, you’re victorious.
I don't know whether it was a Julius Caesar kind of thing or whatever.
Anyway, it was the motto of my prep school, and I always remember it - it's what we've done at DT - we've just stuck with it.
You know, through the good and the bad, if you stick at things long enough and you keep on working things do turn for you.
And so, it's the advice that I gave my daughter who's just starting a software job up in the city.
She’s new to technology, new to the market.
And I said just “look, just stick with it”, it's a great one that we often talk about.
They often say you have to spend 10000 hours on something before you can call yourself an expert.
Oh, that's right- and then you learn to love even the most boring things.
Look - here we are in the retirement market! What could be more boring than that? But it's so important, and there is excitement in it when you persevere.
So I would say perseverance is the key thing insofar as my advice for young people wanting to enter the financial services market.
There’s also a people thing here as well in that not only are the people fantastic within the marketplace, but actually, you're designing and developing propositions for people.
That’s exciting because you're developing for people of my age as well as for people of my daughter's age.
It’s intellectually satisfying and there are lots of bear traps, you know?
If you don't listen to your customer, you know, and you think you know best - there are so many failed propositions that looked good on paper.
Yeah someone mentioned to me once that we see more change to retirement legislation than any other area geographically in the world.
You know, some years ago, maybe something like a piece of legislation a week or something.
It's changing but yes, the market is not without its traps.
It is changing, you’re right.
And it's a bit like boiling the frog because you don't see it immediately.
But if you had to wind the clocks back, say five or ten years and you went to a provider website and pressed on the pensions button, you'd probably see a personal pension - a Sipp or Ssas.
You do the same now and you're seeing inheritance tax, lifestyle issues, things that you can do in retirement, as well as the classic pension products equity release you.
You're seeing a plethora of propositions because I think the providers are starting to understand what people want.
It's a much bigger mix, isn't it?
And so life is becoming more complicated for a provider because you're no longer within the tram lines of just being a Sipp provider.
If you sort of look at the Sipp market actually, it's consolidating because it seems as if there's no further growth in that single market.
You've got to extend it.
So lastly Chris, one of the areas that I think is fascinating and not enough people know about, is that you started the Singing Gorilla Project in Uganda.
During COVID you published a whole series of essays and pictures and stories that also allowed you to talk about how that experience has reflected on your business life and perhaps the struggles they have with day-to-day living and all those things.
It would be fascinating to hear how you got involved with that.
Yeah, so in 2014 my wife signed up to do a trip to go and see the mountain gorillas.
She’d paid the deposit and then noticed that there was camping involved and that there weren't hairdryers available in the middle of Uganda.
So, I said, “look I'll do the trek for you and you can go off to wherever you want to go”.
I turn up to this trek and I'm one of two men with 30 other women. We did what was about a five-day trek and we ended up in this village called Nkuringo in the very South West of Uganda.
This is between the Virunga volcanoes bordered by Rwanda and DRC, and then the Bwindi Impenetrable Forest where the mountain gorillas are.
And so I just sort of fell in love with the place because it sort of, not only is an amazingly beautiful part of the world, it's at two and a half thousand meters in altitude o you don't get that intense heat.
It's like a nice English summer's day, you know, and the scenery is more like Devon than it is to the Serengeti.
So, we decided after a few drinks in the local bar to set up a music school, you know, and a couple of the locals said, yes, that's a really good idea.
We set up the music school, because of course, what we wanted to do was to create a language which was common between both the people in the West and the people over there.
We wanted to make sure that we would take musical instruments that had been used in the UK or Europe because we wanted to tell a story that an instrument had been used many years ago - that the sound that instrument had made is still in the ether.
And so, it was like a connection from the past to the present.
It was a lovely story.
Anyway, once they got bored with that story they said, well, “actually, really what we need are water tanks”.
And so, we started to install water tanks.
These are 3000-5000 litre water tanks.
And so, what we would do is create cement foundations, place the water tank and then get some guttering off of the roof so that when it rains it fills up the water tanks.
So today we have over 80 tanks dotted about the area and we put these stickers on them.
You know, I've tapped up a few people in the financial services to sponsor them and so you can be walking down a little mud track somewhere and you'll see someone’s logo.
From what I could gather, there’s now a whole ecosystem, a village, and a means of earning a living, and getting an education.
Yeah, we employ over 30 people now, we've built a hospital, we've built classrooms and schools and then we construct latrines as well.
The way you construct latrines traditionally, is you build a pit and then you put planks over the top and when it's filled you build another pit.
But what we started to install are bio-toilets, and we put them into schools where the effluent then gets turned into methane to power a kitchen.
And I think you said to me, that this year the hospital went live and you had your first births out there?
The maternity ward opened on the 9th of July, we got a telephone call saying, hey, we've got our first baby, and you know, we rushed there to see a mum who had just given birth.
She was not particularly enamoured to see us but tolerated our presence as we were taking pictures of her and all this.
And since July, we've had many babies born there.
What an amazing, project – an incredible thing to do.
Fascinating. Thanks for your time, Chris. Appreciate it.
Hopefully, we've given people the chance to know more about you, Chris Read, and Dunstan Thomas.
Thanks very much.
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