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