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Ian McKenna: Advisers must embrace next generation technology

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nViso’s presentation at The Platforum’s Top Gear III event showcased technology with enormous potential to address some of the most challenging issues in our industry.

First, understanding what a client really thinks about issues raised and questions asked and second, ways in which systems can begin to measure the extent to which consumers understand the information we present to them. These both obviously have enormous compliance benefits.

If technology can deliver a way of scientifically identifying and recording how a customer feels about issues raised in, for example, know your client and risk profiling processes, this can help us ensure that recommendations are more appropriate.

In his presentation, founder and CEO Tim Llewellyn explained social desirability bias, the tendency of respondents to answer questions in a way that, consciously or subconsciously, they believe is socially acceptable or popular with others, can result in the verbal responses clients give to questions being less than accurate. This is a reality that advisers know well.

By recognising non-verbal clues and understanding human emotion we can better pick up on what people are thinking and present solutions that are more appropriate to their needs. 

A belief that machines cannot identify such communications is frequently cited as a reason why automated advice not possible. In this session it was dramatically demonstrated that not only can machines carry out such analysis, but they can do it far more accurately than humans.

nViso’s software uses facial biometrics to measure micro movements in facial expressions, these are not consciously perceptible to the human eye, although humans do subconsciously recognise such actions as part of the way we communicate non-verbally.

Face the feelings

What the human brain lacks is the ability to record and document such communication as part of our discussion as our recognition is subconscious. The software adds this capability which can then be analysed to both recognise what the customer is feeling and provide a way of factoring such feelings into recommendations and compliance reporting.

Science has confirmed that not looking stupid, fear and other subconscious emotional factors have far more influence on human decisions than the current regulatory process allows for. From a compliance perspective there is a general assumption that if you present the right information to clients, they will take the right decision. Advisers know this is frequently far from the case. This science can not only help us demonstrate that such assumptions are not correct but also learn how to address them.

Future iterations of this technology should provide the ability to show people their emotions and help them recognise that they are not taking decisions for the reasons they think they are. This has enormous potential to improve the quality of advice outcomes in the future.

Technology being developed in education is able now to measure the extent to which people reading information actually understand what is being presented to them and their level of engagement, with the material.

Identifying if they are looking at something but actually switching off, if their mind is wandering, or whether they are distracted. By applying the same techniques combined with emotion recognition software it should be possible to recognise where the level of information being presented to consumers is too complex or too simple for their personal needs and represent simpler or more detailed information appropriate to the consumer level of understanding.

This might be invaluable in demonstrating to the Financial Ombudsman Service that although a client may choose not to remember something some years later when seeking compensation, when the product was presented to them it was fully explained to a level of detail which the consumer understood. Such an ability could considerably reduce mis-selling and other regulatory risks.

One of the key attributes needed by workers in the next 20 years is going to be the ability to work most effectively with machines. This is a perfect example of how, working with leading edge technology, advisers can deliver even better service while at the same time controlling regulatory risk.

This technology is an excellent example of the sort of services that the next generation of financial adviser should embrace to achieve better consumer outcomes. It also offers the ability to automate key tasks and enable the development of low-cost fully automated solutions for consumers who cannot afford human financial advice.

Ian McKenna is director of the Finance & Technology Research Centre

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. Dear Ian

    Did you see my last post? I haven’r received a response or comment and I think it is relevant. If you don’t think so please say so.

    In the last month I have purchased a new smart phone and lap top – both top of the range at premium price – allegedly for business use.

    Why then do these devices come loaded with all sorts of rubbish – games, photo albums, music stuff, myriads of social network stuff – none of which I use and goodness knows what else. For heaven’s sake it is supposed to be a business tool – not a toy. Why load it with anything other than the O/S? (Yes I know – to flog people crap they don’t need).

    Moreover the specs on the lap top (Sony Slider) states 256GB, but when I looked it is only 208 GB and with all the rubbish loaded (before I put on my stuff) it only has 170GB free. I realise now that the 256 is the unformatted size, but I end up with an overall 20% less than I thought I was getting and 34% less useable – just so they can load crap that my IT guy is going to have to clear down – if possible.
    The laptop is ancillary to my 2 Terabyte Desktop

    Much the same applies to the phone, but is solved by the insertion of a whopping data card.
    It seems that technology needs to clean up its act in the business environment!

  2. Harry I think you have answered you own question. I am not defending organisaions bundling loads of stuff with hardware but they do it because they can. I would like to think it kerps the cost down but doubt this really happens, just more profit for the manufacturer.

    All the best

    Ian

  3. Trevor Stacey 1st July 2014 at 7:19 am

    Interesting article. Brilliant technology but I can’t help wondering how a client will feel being analysed by a computer whilst s/he is reading something. I understand the risk of mis-selling but I for one would not like to be analyses/judged by a machine when buying something?
    It is a bot like – I think you are a bit dumb please read this and look into the camera 🙂
    I spend a lot of time implementing technology solutions practically and sometimes we find brilliant technology which I can’t see working in practice?
    Isn’t this a bit to Orwellian to be used by the public?

  4. I tried to Update to technology by purchasing BT Broadband in October 2012 – since then it has been a nightmare and James Watters in the BT Chairmans office – has refused to correct the issues – and is being deliberately hostile – to providing any service. BT infinity Broadband has been down in St Albans since 27th July 2013 – and I have no Broadbanks service. Last serurday all BT customers had no access – and BT Board of Directors and Chairman has NO COMMITMENT to customers . . . .and does NOT CARE. I have written to Sir Michael Rake Gavin Patterson the Finance Director and the Sales Director – and HAD NO RESPONSE FORM THEM. Currently I can go up to the library and get access – but to Date BT has terminated my banking – terminated my TV licence – restricted access to competitive Car Insurance – or purchasing my Food on Line form Waitrose – or any other food retailer . Our local MP Anne Main refuses to get involved – or retain businesses in the Hertfordshire area – and I await ANY REPLY OR ACKNOWLEDGEMT FORM THE CHAIRMAN OF BT – who is destroying British businesses – for which David Cameron and Vince Cable are fully aware – as they acknowledge receipt of my complaints . So with BT acting like a Chinese Dicktator – BT proves itself to be a Monopoly ( with major shareholders being Blackrock and Invesco Perpetual – so the restrictive trades practices and misleading advertising – BT infinity – demonstrates Infinity is how long you need to wait for ANY SERVICE ( and with Openreach engineers Mohammed – terminates business telephone lines ) – The world of technology should be treated with the utmost caution. Oftel and Ofcom are entirely useless as regulators have been aware of this from outset.. Perhaps Mr McKenna can comment on how businesses can obtain ANY reasonable or working service form the Monopoly which is BT – and their Chief Executives refusal to maintain ANY Business Contract Terms ? MAny people are aware of the abysmal service and failings in BT Contractual obligations – YET NO ONE IS PREPARED TO BE INVOLVED OR RESOLVE THE SITUATION. I would have better service more control in China – than a BT Contract for Service .. . . . take note Sir Michael Rake and the Board. Interestingly Blackrock refuses to check or act – and so our consumers must be alerted to the failures of Blackrock investment managers – who refuse to listen to the on going problems – and continue to use investors money to prop up these Monopolies ( all this from a US company ? )

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