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Ian McKenna: How artificial intelligence can help advisers


Yseop’s (pronounced Easy–-Op) presentation at The Platforum’s Top Gear event last week highlighted how emerging artificial intelligence can create powerful tools to support advisers and help them ensure that they always deliver fully compliant advice.

Its technology can enable businesses to manage the vast amounts of data required for a compliant advice process in ways that deliver the key information to advisers, in context, in seconds, just when it is needed.

Citing pre-eminent psychologist George Miller’s work identifying that the human brain can only process seven pieces of information at a time, Arden Manning, Yseop director of communications and UK business development, identified this as the reason we remember things in sevens, for example the seven deadly sins, seven dwarfs and the seven wonders of the world.

Manning then demonstrated how smart machines that are not subject to such constrictions, can augment the advice process, tracking hundreds of products, thousands of funds and a virtually unlimited set of human circumstances, to dynamically adapt recommendations and take account of an infinite number of variations in individual situations.

This delivers enormous potential for organisations to de-risk their advice processes by allowing one or more centralised specialists to write complex rules, which in turn, can be used to provide a support service available to all advisers enabling them to adapt recommendations to individual client situations, as they arise.

Challenging inconsistencies

It was shown how this could be particularly powerful in addressing conflicting information or objectives that clients might identify, providing a mechanism through which such inconsistencies might be challenged.

This could also be used to highlight where clients expectations might be unrealistic or unachievable and to propose alternative solutions that might move the client towards better outcomes, even if their objective could not be met in a single solution. In some such instances a human advice process might be able to recognise the same points, however, the technology provides an invaluable compliance process to highlight such situations and ensure they are fully documented so that the customer has realistic expectations and the adviser is protected against possible future allegations of poor advice. In other scenarios the full range of variables might be difficult for a human adviser to address in a single thought process, necessitating considerable time to be spent analysing the options. In contrast a smart machine can carry out such analysis in seconds.

This has enormous potential for larger distribution businesses where there is a need to ensure consistent recommendations from large numbers of advisers across the country or indeed internationally. It provides the potential for the skills of specialists centrally to be immediately available to advisers as part of client discussions.

In words that I am sure will resonate with many, Manning characterised the current financial advice climate as working in a state of constant fear; fear of forgetting new regulations, fear of failing to remember hundreds of items of small print in contracts or the minutiae of legislation and fear overall of non-compliant advice.

The current extent of data overload inevitably leads to mistakes, misguided advice and client misunderstandings. Invariably the financial advice industry is seen as to blame. All too often the regulatory response is more regulation which only exacerbates the problem, necessitating the need for further data collection, precipitating more risk of non-compliance and further exacerbating customer frustration.

The next generation of “natural language software” of which Yseop is an example can provide advisers with a powerful support resource that can actually turn regulatory change into a competitive advantage for those organisations who are early adopters.  It can enable new rules to be implemented swiftly and scalably while competitors struggle to make such changes using conventional processes. Services like these have a huge role to play in delivering consistent, compliant and affordable advice in the future.

Ian McKenna is director of the Finance & Technology Research Centre


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There are 10 comments at the moment, we would love to hear your opinion too.

  1. Will this intelligence be at Level 4?

  2. Ah ! so soon; so very very soon, I will be able to lay in bed till 12.30 get up have breakfast (well lunch now) wash & clean my teeth, put the computer on to see how much biz it has generated for me ? have a quick check of the reports and suitability letters it generated, then of to the golf course to mingle with the rest of the IFA,s, a few pints (taxi home) kiss the wife have tea, switch off the computer (its had a hard day) bit of telly then bed !!!!
    Now I’m going to have bog all to do the weekends !!!

  3. “Yseop’s (pronounced Easy–-Op)”

    Oh dear.

  4. Incidentally, the reason people like the number 7 – seven wonders, seven sins, Ronaldo’s shirt number, almost everyone says that seven is their lucky number, etc – is because it is the only number which can neither be divided by, nor does it divide into, any other number that you can count on your hands (except 1). Which makes it stand apart from the other numbers in our minds.

  5. This area of development is generating pace and to me it seems like the natural progression of ‘advice’ – this article, although only in words, paints a clear picture of the advantages to the client (such as potentially reduced costs and a slicker process) and the ability for the market place to adapt to regulatory changes or curve-balls in the advice process that are sometimes difficult to communicate or interpret.

    Many IFA’s are quick to rubbish the impact of the technological advances but my thoughts (for what they are worth…) are that it is down to those individuals and businesses to sell the benefit of face to face advice and offer a service to which the client sees a true benefit over that of a potentially cheaper, quicker and more effective online offering – no different from trying to win or keep hold of clients from going to a cheaper alternative down the road.

    Some clients will always want and the see the real benefit of real human being to talk to and discuss their financial options – where as others will want to find ways to get what they want at a cheaper price and to remain in control themselves – whatever the risks may be.

  6. Elizabeth Farabee 26th June 2014 at 10:15 am

    Hi Sascha Klauß, yes the name is a bit unique! 🙂 Are you interested in knowing the story behind the name?
    Our name is an inversion for the word “poesy” which means ‘poetry’ in Middle English. We believe that a poet embodies human creativity at its best: he begins a poem by writing down a theme and lets his creativity inspire his art. At Yseop, we do the opposite – we don’t start from creativity, we use reasoning to guide our writing.

  7. Elizabeth Farabee 26th June 2014 at 10:17 am

    Hi PJ-Botham, interesting comment! I get the impression, however, you view this type of software as a tool that would replace the adviser. Instead, think of it as a tool that would enhance the adviser’s work — not replace it! We (at Yseop) agree with you that human-to-human interaction is still very important!

  8. Hi Elizabeth Farabee, I understand that your offering is designed to aide the adviser – my comment was kind of in response to the tongue in cheek one made by DH 25 June 2014 1:08 pm. It just seems that almost weekly there are new offerings of IT systems that will either aide advisers or are designed to allow the client to make their own choices directly.

    As things develop further it seems the technology is gearing towards taking the emphasis away from the IFA (although I accept that your offering is tailored to work with the face to face adviser) and allowing the IT system to make the ‘advice’ while apparently removing the regulatory risk element.

  9. I’m amazed that a lady would buy into the assertion that the human brain can only cope with 7 things at a time. My wife keeps telling me that women can multi-task and has huge lists of what women can achieve simultaneously.

    The most srtiking use of the number 7 was Stirling Moss’s racing number. Other than that i don’t buy into numerology. I regard it in the same vein as alchemy.

  10. This has only slight relevance to the topic, but in all seriousness I would like to pose a question to Ian.

    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!

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