A Supersonic Digital Masterclass

Expert:          Ian Woodhouse, Head of Strategy and Change, Orbium
Facilitator:    Matt Weaver, Consultant Director, Objectivity 

Key takeaways:

• Advisers resisting digital adoption will fall by the wayside – no option anymore
• Assumption that older clients won’t use technology is no longer a valid argument
• While UK financial services typically lag other sectors/countries, pace is picking up (albeit slowly)
  • E.g. European countries are using predictive analytics
  • Asian countries have a more nascent private banking sector, no legacy so greater digital adoption (e.g. use of WeChat)
• Role of wealth adviser will evolve to a coaching position under a “collaborative network model”

Some key questions:

• How do we strike the right balance between human and machine interaction?
  • There is not one answer; need to enable advisers to work with clients in a way they want to work.
  • About testing, learning and (potentially) failing - initially building minimal viable products because needed to adapt and work quickly.
  • Levels of use vary depending on risk/action – e.g if a basic request, clients are generally happy dealing with a bot, if levels of anxiety or negative sentiment rise, typically a human interaction is preferred.
    • Will get to a stage where that ‘tipping point’ will be known and the conversation moves from a robo to a human.
  • How is AI being used across the wealth industry?
    • Not seeing much take-up yet in the UK, but tends to build in stages:
      • Build foundation through getting data in one place rather than siloed
      • Bring in robotic process automation (RPA) from front to back office
      • Introduce chatbots for helpdesk assistance where needed
      • Gaining and developing client insights
      • Using full AI solution to build predictive analytics over client behaviours
    • What are some considerations around ethics and transparency?
      • g. with an automated decision to grant a loan, for instance, is it fair to just offer a rejection without an explanation?
      • It has been a stumbling block for robo-advice models as clients want to know who is responsible for the automated response.
      • There is currently a possible trade-off between accuracy and fairness.
      • Airline industry currently uses a ‘fly by wire’ strategy where the human pilot can take control of the autopilot at any time. In other words, not to replace the adviser but enable them to use the tech to do their job more efficiently/
      • See a future where advisers become more akin to a life coach, automating actions around life goals and using technology to ensure the plans stay on track around those goals, and overriding them when risks appear to veer them away, rectifying the situation.

Risks/challenges of digital solutions:

• The need to make an immediate shift – teach people quickly how to use technology, how to deal with clients, and in turn get them to use it.
• Organisations need to manage the cultural shift with their personnel so to not scare or overwhelm with a broad-reaching change.
• The use of new technology introduces additional security concerns – i.e. you can give all your team iPads and apps to work from, but are they secure, encrypted, etc.
• There is a clear lack of education and understanding. When we don’t understand, we are less inclined to trust a system (and no one wants to be first in using it, so market continually lags).
• The first stage robo-advice model has not really worked because wealth is personal and emotional.

Opportunities/benefits of digital solutions:

• Using a digital system can lead to better MI and ultimately greater productivity through transparency of data (e.g. contact notes improve as an individual’s performance is more visible).
• MS Teams was namechecked as one solution being used increasingly across the sector (can eliminate email, improve collaboration and team/workflow oversight, automation of certain processes, document management etc).
• The pace of change can be introduced gradually so as not to incite fear with new users.
• ‘Next best action’ as used with digital consumer brands such as Amazon or Netflix e.g if you like X you will like Y, your peers are doing Z…
• ‘Next best action’ can drive better client outcomes, satisfying the regulator i.e. if you have a goals-based view and the markets shift, you can promote to the client an alternative action, using financial planning projections to compare the proposed outcome against industry benchmarks.
• The opportunities are not just for financial outcomes but are also powerful for relationship building. Through understanding client interests, the wealth manager can be the interface bringing together like-minded clients and associates.
• The role of adviser will move towards a wealth ‘coaching’ role; giving clients more control over their retirement and financial plan but acting as the connector between the relationship manager, product experts, lifestyle coaches etc, using technology to underpin each part of the process.