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.
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