A tech-focused panel discussion Monday morning at Broadridge’s GetConnected2019 conference in Keystone, Colorado unsurprisingly kicked off with an anecdote about millennials.
“My 20-year-old niece is, of course, a digital native,” moderator Sarah Simoneaux, president of Simoneaux Consulting Services, relayed. “I asked her if she would just rather have her phone implanted in her wrist, which they can do now in Sweden to unlock doors, board trains, etc. I think of the movie Minority Report, but she isn’t worried at all. Rather than using a device, she sees in as being directly connected to the ethernet.”
“It’s called biotechnology, and we will be known by our identifier, which today is our Social Security number,” panelist Dutt Kalluri, Senior Vice President of Global Technology with Broadridge Financial Solutions, noted. “It’s not that far away. In general, we are dealing with a rewired investor in the way millennials act, think, communicate, etc. and technology is a critical component.”
He then explained the “The ABCDs of Innovation,” the session’s title and a theme of the conference, with the phone providing artificial intelligence (A), the network involving blockchain (B), all stored and accessed via the cloud (C) and ultimately viewed through a digital display (D).
Transformational tech
Importantly, author and Oxford University professor Carl Frey explained that AI is a general-purpose technology, like steam, electricity and computers and will, therefore, have a massive impact.
“It will transform every industry, and the bad news is that’s it’s significantly disruptive in the short-term,” he said. “Fully 47% of industries and jobs will be affected. Low skilled, lower-income jobs will be most exposed. Bit the good news is that it will largely not replace complex interactions and relationships.”
AI is particularity good at predicting future trends. It differs from regression analysis in that regression analysis is right on average, while AI is right every time.
“It will significantly improve performance, business models and financial services,” Frey added.
The discussion then turned to its impact on the advisor specifically.
“In our defense, we are heavily regulated, a reason why we haven’t adopted new technology as quickly as other industries,” Lisa Kottler, President of 401kottler, argued. “For instance, every trade needs to be authenticated to make sure no fraud is involved.”
Blockchain, she said, is an answer for many storage and processing issues.
“Banking and custody is off course heavily looking into this. In 401k, we’re arguably bigger in asset management in particular, but a step behind the rest of financial services.”
Kottler pointed to blockchain’s possibilities in streamlining rollovers, noting that a friend was just hired on at a major recordkeeper.
“The friction associated with her retirement plan rollover to the new company was enormous. The asked her to fax the information, in 2019!”
Mark Kalafsky, Partner with Enterprise Iron Financial Industry Solutions, said his two nephews recently graduated from college and are working in investment banking, and if it’s not mobile-phone enabled, they laugh at whatever the technology might be.”
Simoneaux closed by noting that one of her consulting clients, a call center, can now identify through the use of AI whether a call is potentially fraudulent.
“They can analyze the tone of voice, the info offered and asked for and the order of the questions to flag potential problems,’ she concluded. “It then prompts the customer representative with the next steps.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
