Technology

EXCLUSIVE GUEST COMMENT: The Robot Will See You Now

Sebastian Dovey Scorpio Managing Partner 20 November 2014

EXCLUSIVE GUEST COMMENT: The Robot Will See You Now

Are you ready to sit down and deal with a robot in your private banking life? Not sure yet? The author of this item, Sebastian Dovey of Scorpio Partnership, examines the issues.

The following article is by Sebastian Dovey, managing partner at Scorpio Partnership, the consultancy specialising in global wealth management. Seb has spoken at numerous events organised by the publisher of this news service and he is well known as an expert on the industry. In this article, he looks at the growing phenomenon - or commentary - of the "robo-advisor". (See examples of articles here and here.) The editors here welcome feedback on this issue and reaction to the points in this article.

 
Meet Ellie. Ellie is a psychologist being honed to help US soldiers deal with traumatic experiences.

Her avatar looks like it has jumped straight out of a computer game but is actually the creation of Dr Jonathan Gratch and his colleagues at the Institute for Creative Technologies in Los Angeles. Aware that people often don’t feel comfortable telling doctors about embarrassing issues, the team of researchers set out to test a hunch that people might find it easier to talk to a computer instead.

In August, an article in The Economist explained how Ellie was put in front of 239 people who were asked to chat about their lives. Half of them knew the truth – that Ellie was an artificially intelligent virtual human – and the other half thought Ellie’s interactions were controlled, puppet-like, by a human behind the scenes.

Each interview began with the same question, “where are you from?” and went on to probe further. Whilst the participants answered, their faces were tracked to measure signs of sadness. After the chat was complete, responses were analysed by real, human psychologists who rated each person’s “willingness to participate”. A follow-up questionnaire asked about how disclosing information to Ellie had felt.

Results show that although everyone interacted with the same Ellie avatar, what they had been told about who they were talking to – man or robot – significantly altered their responses.  People who thought Ellie was simply a computer were far happier to answer questions. Their willingness to disclose information was 1.11 vs. 0.56 for the other group. Equally, the first group felt happier throughout the process.  They exhibited sadness at a score of 0.08 vs. 0.12 for the second group.

The Ellie research project is being partly funded by America’s DARPA, in the hope that “she” might be helpful in assessing the psychological problems of soldiers.

Delve a little deeper into the work underway at ICT and you find a whole host of virtual humans. Amongst them, “Sergeant Star” answers questions about a career in the Army and “Ada and Grace” are “two bright and bubbly educators” who help people get the most from the Boston Museum of Science. The institute’s work in the area of virtual humans and simulated – yet natural – conversations range across a variety of scenarios all of which share a commitment to using virtual humans to either replace or augment human to human interaction.

Would HNW investors speak to an avatar?
But let’s return to the world of financial planning.  Would HNW investors really consider talking to an avatar instead of their trusted advisor?

The answer is… we don’t yet know. What we do know, is that we have spoken to over 40,000 wealthy individuals online and that they are open about what their expectations are.

We also know that individuals’ experiences in one walk of life naturally shape their expectations in many other spheres. It is the online service standards of Zappos or Amazon that now set the bar, for example, for most retailers in both the on- and offline worlds. As Google starts to get better and better at “reading our mind” through intelligent search, we will naturally come to expect the other brands we rely on to be just as good at anticipating our needs. So, it follows that if well known global brands adopt virtual assistants, it will be only a matter of time before investors get comfortable seeing (or expecting) them in a financial advice setting.

According to research from Nuance, the leading creator of intelligent virtual assistants, 58 per cent of 18 to 25 year old smartphone users are periodically interacting with a speech-enabled virtual assistant. In August 2013, USAA was the first financial institution to deliver a speech-enabled virtual assistant to its smartphone app users. USAA members can now pay bills, call up past transactions and view account information. Dominos and Coca-Cola have similar virtual assistants on their mobile apps and websites.

Some 90 per cent of consumers say that a positive experience with a company’s mobile app makes them more likely to continue doing business with them.

We might feel a million miles away from the point at which HNW investors might be willing to conduct at least part of their business with a virtual assistant, but in Asia digital tools are not only a valid alternative to human advisors but actively preferred.

Data from the Capgemini RBC Wealth Management 2014 Asia-Pacific Wealth Report reveals that when asked to roll the clock forward five years and imagine their wealth relationships, Asian investors (APAC excl. Japan) don’t simply envisage more digital, the vast majority (82.3 per cent) expect their wealth management affairs “to be conducted entirely or mostly through digital channels”. That’s compared to only 61.1 per cent of HNW individuals in the rest of the world who share their expectations.

In Asia-Pacific, investors consistently place more importance on digital interaction than they do on having direct contact with their wealth manager. According to the 2014 Asia-Pacific Wealth Report, 37.8 per cent of Asia-Pacific (excl. Japan) HNW individuals placed great importance on digital over direct, well above the 25.7 per cent in the rest of the world.” Take a moment to consider that the ranks of ultra-wealthy Asian investors will soon overtake their counterparts in North America and the case for digital investment tools gets stronger.

But don’t be tempted to dismiss the human factor.  The drive to digital in Asia doesn’t mean that traditional advisors are not important – they are – they simply need to work at creating an integrated client experience that delivers what clients want as they seamlessly weave between channels.

Nailing CX depends on listening to clients
Creating a client experience that delivers the service that investors crave must therefore be the objective of each and every wealth manager hoping to manage the assets of wealthy individuals. Doing that will demand that human advisors acquire better listening skills, and fast.
Computers have proven their ability to remember what clients tell them, learn from that information and use it to produce a superior response. Now it is time for human advisors to do the same.

The inputs are different. Instead of analysing billions of pieces of data and spotting patterns, human advisors will have to depend on good old conversations with clients.  Where they don’t have the time or skills to ask clients detailed questions about what they want, they will need to buy in wealth management market research expertise from those who do. And once that insight has been gathered, the industry will collectively need to get a bit more imaginative about how a hybrid combination of digital and human advice might look.

This year, we began the process of imagining the future by using our annual Futurewealth survey – conducted with over 3,000 HNW investors – to conduct an in-depth audit of the wealth management client experience. The results are freely available for download from our website and should make interesting reading for anyone pondering the future of wealth management. (To view one Futurewealth items, see here.)

But the million dollar question is what will the industry choose to do with what it hears?  If it fails to respond with a value proposition that is carefully tailored in line with client preferences, it might very well be the robot that sees you next.

 

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