Platforms playing catch-up with the rest of financial services


Across pretty much all areas of financial services artificial intelligence (AI) and machine learning are starting to be recognised as integral components of the client engagement toolkit. With one stand-out exception: platforms.

A recent survey by EY and Invesco, ‘Transforming Paradigms: Global AI in Financial Services’, sought the views of 151 financial firms from 33 countries on their use of AI and machine learning.

It suggests AI will transform financial services, with nearly two-thirds (64%) of firms expecting to see AI adoption generating new revenue potential through new products, process automation, risk management, customer service, and client acquisition.

Tellingly, the survey found only 16% of firms are currently deploying AI in these areas, suggesting there’s a huge opportunity for those who embrace the possibilities.

Looking for clues

Which is where investor portals come in, writes Praemium.

If they’re worth their salt they become an integral part of the adviser’s client engagement toolkit.

Investor portals can facilitate instant and secure communication between adviser and client. Many also provide a shared document hub to allow the facility to manage ongoing requests or activities between the parties.

With digital signatures becoming more widely adopted, the entire on-boarding process can be delivered through a digital platform too. From fact finding and risk profiling, to delivering statements of advice, investors now can input and receive this information digitally and provide the authority to process them in the same way too.

In addition, if AI and machine-learning enabled, they provide an opportunity for advisers to look at the digital habits of their clients to understand their own service proposition and see if there are areas they can improve upon or where they may need to step in to provide more hands-on support for clients.

To our mind, investor portals can, and absolutely should, be providing advisers with intel on the invaluable clues and cues their digital footprint leaves behind. Far from being a substitute for the personal touch, an investor portal continuously evolving through machine learning can act as both a complement to, and source for, personalised service or even hyper-personalised service.

For example, a quick survey of advisers who use the Praemium platform found that they are using AI to improve client engagement in the following ways:

  • Using the data on frequency and timing of client log-ins to time when to issue comms they really need the client to read.
  • Noting the communications clients revisit and stepping in to offer additional support or clarification where required.
  • Using marked deviations from usual behaviour as a sign of possible distress or vulnerability and checking in on the client.

These are just some of the ways advisers tell us they are using the digital cues and clues left by their clients. Data like these are hugely important for influencing client engagement strategies. But they need to be captured first and that requires having both the appetite and the agency on the part of the platforms providing them to innovate in increments. In other words, they need to be continuously improving.

Half-hearted ambition

However, the effective duopoly of outsourced platform technology provision in the UK raises the question of what appetite there might be left to truly innovate? With the prospect of just two or three bloated choices, where’s that fire in the belly going to come?

When you have a lack of choice and high switching costs, as evidenced by the number of highly disruptive platform upgrades which have made the headlines, you see a stifling of innovation and a reduction in the improvement of productivity for the whole industry. Understandably, if you’ve just gone through the pain of replatforming, the last thing you want is more change.

But platforms can’t afford to stand still.

And there’s the rub. If a platform doesn’t own its own technology, not only are they held hostage to their outsourced technology provider’s biggest client which, by shouting loudest, will dictate what makes it onto the developments roadmap; but even the prospect of hugely beneficial innovation becomes unpalatable because it needs to be swallowed whole, not in bite-sized fortnightly releases.

It is, therefore, sadly little wonder our sector is still largely playing catch-up with the rest of the financial services when it comes to AI and machine learning.

This article was written for International Adviser by Praemium, which was recently announced as the sponsor of the Best Practice Adviser Awards 2021.

Entries are now open across all regions – to find out more, click here