Editor's note: Rob Seidman started his career as a financial engineer at Algorithmics, a financial risk management company that was one of the first major FinTech firms, established over 30 years ago. The company was acquired by IBM in 2011, and Seidman was present pre- and post-acquisition. After leaving IBM in 2013, Rob worked as a quantitative strategist at Quantifi and later as a senior presales consultant for S&P Capital IQ. In March 2016, Seidman returned to IBM. His responsibilities are split between development, product management, and sales to bring financial services solutions to the cloud. He previously spoke with us about whether wealth management firms should do cybersecurity.
A change in wealth management is coming. At the moment, people who are 30–40 years old are beginning to have investments on their minds. In response to demand from customers and the market, wealth management platforms try to adapt, but their hands are tied with the need to maintain infrastructure and security.
Artificial intelligence, chatbots, and great user experience (UX) are almost here. But first, the infrastructure should become cheap and accessible to all.
Chatbots Are The Future Of Finance
AI has proved that raw data processing allows wealth tech companies to get valuable insights. It can reduce the time it takes to do things like processing huge numbers of news articles to intercept market triggers. It’s not always possible to automate a number of pieces of that workflow in a meaningful way, whether it’s just not feasible or cost effective. That’s why Seidman is sure that AI isn’t going to replace advisors wholesale in their current jobs. Despite that, there’s a lot of value in natural language processing in wealth management practice.
“There’s been a real, exponential change in the way that one can communicate with chatbots and conversational agents in the last few years. I don’t necessarily think that’s going to subsume the entire agent-client relationship, but I do think that as individuals —especially the younger generations— are more innately connected to devices and prefer to communicate via text instead of phone call, ways of facilitating that are going to rise to prominence.”
Also, some processes could be automated and made better, but people still want to talk to people, especially while making complex decisions. The objective should be to equip those people with tools to make the conversation more productive.
“Anecdotally, an ultra-high-net-worth client may come in and say, ‘What happens to my portfolio if…?’. Recent innovations afford them the ability to get an actual quantitative answer in a way that can be articulated to you, even if neither client nor agent are quantitative people. The challenge is to find some solutions around the way that information is communicated to clients.”
Do Millennials Deserve Special Treatment?
The topic of millennials in finance speaks to a big argument going on right now. They require financial advice provided in a certain way, but they don’t have enough wealth. A part of that generation, Seidman comments that one thing needed is differentiation—a craft portfolio. Millennials want everything they get to tell a story.