Whenever we hear the headlines about robots and artificial intelligence it makes us think about some far-off Sci Fi thrillers but the reality is that to hear about this within finance, you don’t have to look that far afield. Wherever you look right now there are different corners of the financial services industry and investment management ecosystem that are changing around us in significant ways. This is something that is becoming increasingly difficult to ignore, and you would be wise not to. We continually hear about the robo-advisory framework, AI (artificial intelligence), blockchain and many other innovations that are altering the landscape for everyone. You can’t really go a day without hearing about new technologies, new companies or new innovations that are poised to disrupt business models, which may have a consequence of displacing people and companies not embracing this change.
Almost everyone we encounter in our travels is interested about the business potential and how to leverage technology to optimize their businesses and better deploy resources but, at the same time, depending on where you sit, can feel threatening. This is the type of thing where if it’s your business model that is getting disrupted, can wake you up in a cold sweat in the middle of the night.
The Anevis Solutions team was at a recent exchange traded fund (ETF) conference here in Canada and the concept of automation of traditional business processes, from investment management to document generation, was one of the hottest topics over the two day event. The industry is trying to understand in what ways this change will impact them and (to use a hockey metaphor) know where the puck is going. This is the right approach, as this is surely going to be sweeping change that offers big potential for those who embrace it.
A more strategic approach when considering new technologies, processes and innovations is to see how you might be able to adapt your business for the better. Think about how this could be an opportunity to better deploy valuable team resources, manage your business costs and drive results. This can be seen in the United States with some of the largest asset managers, like Vanguard, who are acquiring robo-advisors and adapting a hybrid model to embrace this change, reducing costs and optimally deploying their human resources.
If you are one of the larger, mid-size or smaller asset managers, a good way to think of this might be to embrace these technology advancements and try to best understand which non-core business processes may be the most draining to your team’s time and morale, and you will often find this is a good strategy for using vendors and external technologies.
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Here at Anevis we work with clients who are considering this from the perspective of their investment and performance reporting. They may be spending a significant amount of time supporting their monthly, quarterly or annual performance reporting for all of their funds, possibly with entire teams dedicated to performing this function. We believe they would be best served thinking about how they could more optimally use this time, working on projects that can truly add value to the business.
It is true that the robots may be coming, and may be something that is unavoidable, but this shouldn’t be met with fear, but more realistically viewed from the standpoint of how to evolve your business and embrace the change from a strategic lens.