That third wave entails a “more seamless communication between technology,” Stich said. “Consumers and advisors are going to expect more instant communication between the technology stacks: That's CRM talking to financial planning software. That's risk tolerance software talking to CRM. We're going to see more of that before we see AI really taking shape.”

More integration and communication between systems puts more pressure on firms to have effective cybersecurity prevention and response plans to address cyber risk.

“As these communication channels begin to open, it's much more important that we are vigilant in our security methods,” Stich said.

He predicted there will be an increase in discussions about the role of governing body to oversee APIs and other types of seamless communication used by different technologies.

“Right now, there is no regulation. The communication channels, that application program interface or API, are not regulated. There are no cybersecurity requirements to communicate between two technologies, and many technology folks are beginning to start asking those questions.”

The first step may be agreements between different technology providers that set a cybersecurity baseline before integrating with each other. Providers “might say, 'Hey, if you want to talk to our technology, you have to follow these guidelines. These cybersecurity needs must be met prior to communicating with us.'”

A governing body that addresses cybersecurity may not necessarily be a regulator, but may take the form of a non-profit or a consortium of large firms that create guidelines for firms, Stich said.

Financial Innovation Now is one such consortium, comprising Amazon, Apple, Google, Intuit and PayPal. It calls for a principles-based standard for protecting consumers' financial information rather than adopting a dominant technology.

The National Institute of Standards and Technology, part of the U.S. Department of Commerce, released a framework in 2014 outlining industry standards and best practices to help firms manage cybersecurity risks. An updated version of the framework is expected in early 2017.

Technology and the DOL Fiduciary Rule

Along with cybersecurity, the DOL fiduciary rule is among the most pressing issues for financial advisors today. Stich believes the industry will continue to adopt “sophisticated planning tools to help advisors and firms comply with those new standards.”

He joked that technology firms must have lobbied for the rule because “technology really is the best, easiest and most efficient way to comply with the rule,” as it allows firms to offer sound financial management, archiving and reports, and “transparency, which will help meet the best interest of the client [requirement in the rule] by providing a more holistic financial planning picture.”

Amid speculation that the DOL's fiduciary rule won't survive a Trump administration, at least not in the form finalized in April 2016, Stich said his position on how credit unions should proceed is unchanged: “Continue moving forward.”

Credit unions have already invested time and money implementing the changes needed to comply with the rule, he said.

“Technology, especially compliance workflow technology, is beneficial to their firm regardless of the [fate of the] DOL rule,” he said. It can help them be “more efficient, they can see much more of the behaviors of their advisors and their end users, the clients. That's going to benefit them in the long term in their profitability and how they deploy digital advice.”

On a related note, Stich believes robo-advisors will “continue to commoditize and will become ubiquitous. […] It will be a race to the bottom,” he said. “With it commoditizing so quickly, the value of the tool will drop.”

He believes automated wealth management tools will shift from simple robo-advisors to “more authentic, self-directed planning tools” developed in-house by firms. This next generation of digital wealth management tools will provide a better value proposition in relation to the firm's brand, he added.

Today's robo-advisors are “becoming more and more vanilla,” he said, with “the same risk tolerance questions, the same savings questions, the same age questions.” The next generation of self-directed planning tools will be more like a “life coach” than a robo-advisor, he said.

“We're going to provide much more in terms of coaching through life experiences, meeting those financial goals one might have. It's going to be a much more intuitive, much more welcome experience, than your standard robo-advisor,” he said.