From a business perspective, I love August. I understand for many it is a time for vacation, last-minute activities before the kids go back to school and, hopefully, relaxation, but it’s also a nice opportunity to work “on” your business instead of always working “in” your business. When this involves new technology objectives, you might simply need to get away in order to truly conduct the best evaluation. This is certainly the case when the idea is unique and perhaps not as familiar, which brings us to this month’s discussion.
You probably have already experienced or at least heard about machine learning, behavioral analytics and artificial intelligence (AI). This cutting-edge technology is definitely starting to have its impact in a number of industries and professions. A simple example is when you get into your car after work and your smartphone automatically alerts you to the traffic conditions and the time it will take to drive home. It is unlikely that you specifically asked for this information, but the device “learned” that this was probably important information at that specific time given your previous activity and history.
At the recent Pershing INSITE Conference in San Diego, I was part of a panel that discussed how this emerging technology can and will be used to benefit advisors and their firms. Businesses such as custodians, product companies, fintech companies and research providers will offer or incorporate AI technology to improve their products and services. AI technology can be a complex and even confusing topic, which makes it important to connect how we operate today with potential benefits.
For our profession, which involves extensive amounts of data, there is a lot that we can do to leverage various types of AI technology. Today, a significant number of the tasks that advisors do involve pulling various reports: asset allocation, performance, cost basis, tax and financial planning. Some of these reports are run in isolation, others combine data from different sources, and some are simply ad hoc or on-demand reports.
Furthermore, with a majority of these reports, the user is directly driving the process and implementation. As a profession, we have made great strides with the reporting options available, but AI technology can take it to a whole new level.