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Disruption and rapid change: Are you ready?

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Advances in data science, machine learning (ML) and artificial intelligence (AI) are opening up our industry to numerous new opportunities, while also creating a pressing need for business progression. Operating alongside open data, open banking, open finance and the like – phrases we have all heard – we are now in an environment of change; we believe very rapid change.

With these advances, we can be sure non-traditional financial services players are eyeing opportunities in our market. Disruptors such as fintechs, digital giants and players from other industries will be looking at how they can build routes into the lucrative financial services market in areas where they can quickly add value.

The question is: Are you and your business taking advantage of the changes already impacting our industry to stay ahead of the competition? Nick Parsons, CEO, Bravura Solutions, explores.

Pace of innovation

While increasingly innovative, a large proportion of the financial services industry has been built on legacy systems which in the past have often dictated the rate of progression. Innovation has also been affected by regulation; and to some extent this is how it should be in an industry where outcomes can define people’s lives, for better or worse.

These capabilities are being delivered to market now – and those coming down the line – are enabling us to make better use of the resources we have in a compliant manner and to do so much more for our clients.

In every part of our industry we should be questioning: Are we operating in the right environment? How are we operating in that environment? Are we using the right technology? How can we better use technologies available to us to both run more efficient and profitable businesses and deliver improved outcomes for our customers?

Through asking these types of questions our operating structures can evolve and embrace change to give tomorrow’s client a better experience. As an industry we need to be targeting the future client, their wants, needs and expectations – because they are rapidly changing too.

Where we can win out

The primary enablers for AI and ML developments are access to good quality and sufficient quantity of data. One of the huge advantages that incumbent financial services companies have over other industries and new entrants to the market is the amount and depth of data that we gather to deliver our products and services to our clients. Some of this data has a long history and is quite sophisticated, offering insights into clients’ wants, needs, goals and aspirations – far beyond the actual ‘financial’ information itself. Using our data we can predict consumer behaviours and better fulfil their needs.

Business impacts

With the amount of consolidation in our industry today, the ability to analyse huge data pools and understand relationships between data is not only necessary but offers us unprecedented insights which can be turned into business opportunities.

There is increasing interest now in using ML and AI to deliver financial advice. Within the past five months, big name providers such as JP Morgan, Vanguard and abrdn have all launched or bought into this market in the UK.

Self-serving investment through use of algorithms and automation of advice processes to lower operational costs, using ML, are already being used to varying degrees of maturity and success. We see ML and AI being effectively used in a more advanced way, to solve specific technical challenges in the advice process, such as tax optimisation, in a quicker and more efficient manner. The opportunities presented to run more efficient, cost effective and profitable purely digital and hybrid financial advice operations are considerable.

From a customer operations perspective, a ML driven microservice can take unstructured communications such as emails and voice messages, understand the intent, the sentiment and process and respond to the request. Human interaction is kept to the necessary tasks and responses.

It can also provide real-time insight to management teams by going one step beyond simple audit and recording MI to delivering real-time monitoring that anticipates behaviours. This future insight pre-arms the business to opportunities and signposts paths for progression. In an age where turning on a dime can mean instant upscaling of customer response teams, it is easy to see the growing role of AI and ML in our industry.

Furthermore, on social and cultural levels, AI can introduce algorithmic fairness to help to drive out biases that may exist, like those around race and gender, and so be used also in the fight against inequality and injustice.

Learning more

Our expertise lies in capturing and then harnessing the boundless opportunities that new technologies such as AI and ML present within our industry.

As a leading technology company our mission includes informing and advising our customers about the latest emerging technologies. We do this by demonstrating where and how such technologies can increase speed to market and improve operational efficiencies in our highly regulated world.

With inevitable disruption, accelerating capabilities through ML and AI and increasing customer expectations around digital servicing, transparency and sustainability, added to the mix, we can be sure of one thing – a highly competitive future.

If you would like to discuss the themes in this article, please get in touch or join us at FundForum International 2021 in Monaco.

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