Artificial intelligence. Predictive analytics. Big data. Investment industry experts are telling firms they need to get on board with these technologies or risk being left behind. But what do these terms mean, and how do they affect your business?
Wealth management technology and operations consultant Sue Glover, President of Susan Glover & Associates, will be addressing those questions and more in her thought-provoking session at SS&C Deliver, “Looking Beyond the BI and AI Hype.” She’s known for explaining complex issues in plain English. We recently caught up with Sue to get a sneak preview of her thoughts on the subject
Q: What are the most common reactions you hear from firms about AI and machine learning?
SG: First, firms frequently tell me, “We are so behind in our tech stack, we aren’t close to investing in these tools.” Many firms are focused on upgrading their technology stack and migrating their legacy software. They believe AI applications are too advanced for their current needs. The second thing I hear is, “We don’t understand what these technologies can do for us.” Many firms don’t realize they are already using technology that incorporates AI and machine learning, and don’t understand how they are benefiting from it.
Q: Where do you see the biggest opportunities to leverage new intelligent technologies?
SG: Supporting the back-office or operations area. Many tools that currently utilize AI support the front end of the business – robo-advisors, risk assessment and portfolio stress testing. Meanwhile, the back office continues to manually enter and reconcile accounts where aggregation tools don’t work, and unusual transactions like alternatives and corporate reorgs. The back office is also a firm’s go-to place to explain data or data field inconsistencies between various systems. We are seeing improvements in resolving the manual efforts, but need more work on standardizing data and data fields across multiple systems to reduce our reliance on the back office.
Q: What are some common misconceptions about data analytics among RIA and wealth management firms?
SG: That all data or information derived from analytics is useful. We operate in an information overload society and find it challenging to filter out unnecessary data in order to solve problems and make decisions. There’s also a belief that access to more data means greater accuracy. While big data is necessary to increase our confidence in the results, people confuse big data with accurate data. The good news is our industry is beginning to address data issues by creating a “Chief Data Officer” role to handle data governance.
Q: As an operations and technology consultant, what do you see as a key industry trend that firms will have to adjust to?
SG: While future fintech and advanced analytics won’t replace staff, a firm’s organization chart and staffing roles need to change. I’ve seen firms upgrade their tech stack and migrate to new technology while everyone in the firm stays in the same role. It doesn’t work. Firms end up duplicating tasks – many times with different results.
To hear more, be sure to catch Sue’s session at SS&C Deliver on Wednesday, September 18 at 9:30 AM. And if you haven’t already, register for SS&C Deliver now and join us in Orlando, Florida, September 17-19.
