Coined by Klaus Schwab, the 4th Industrial Revolution promises to develop so quickly that those ahead of the curve today may not be able to keep up with the ripple effect of the changes. At FinServ, we believe it is our job to ensure our clients stay on top of that wave, by providing constant service and insights that take advantage of, the best new technologies.
Why You Should Care About the 4th Industrial Revolution
When we speak to our clients about Industry 4.0, the most common question is, what is it? Why should I care? The term itself does not matter. What does matter is, the name acts as a focal point to enable FinServ to focus our clients on what does really matter.
Whether it is: 1) New technologies embedded in the best industry applications, 2) New agile governance models being put in place, or 3) The core aspects of data privacy that are drastically changing, we believe our client’s need to be ready to adopt and adapt to each of these disruptive forces.
Sears a Cautionary Tale
I was recently watching a piece on how Sears, a company that once was on top of innovation is now going out of business. Each of these anecdotes shows that even the best of funds could end up losing its investors if they do not continue to innovate and take advantage of what technology is offered. There are always hungry new funds, just like Amazon was to Sears that will be more than happy to take your position and your investors if you do not stay on the leading edge.
The Key Challenge
Due to security concerns our industry is a laggard to most new and emerging technologies. While many firms took advantage of the public cloud, a surprisingly high number of our clients are still hesitating to take advantage of this key resource.
We agree with our clients in terms of utilizing the highest standards of protection for their client and investment data, but this should not keep you from adopting technologies in an intelligent manner. It takes extra work and due diligence, but these technologies like public clouds can be safely and securely implemented for any firm. The most critical step is to hire an expert in the technology to ensure it is configured with all the most important safeguards in place.
When you set up a server on Amazon Web Services (“AWS”) you can leave yourself completely open to attack, or you can configure with all the tools AWS provides to be more secure than your own private cloud. It only requires the expertise to know how to complete the configuration.
Speed with Purpose
The terms speed with purpose was something I first came across during my time at KPMG. It was used to describe one of the core values of the firm. I always loved this phrase, because it described something I always believed in, that you should take action and produce outputs and outcomes as quickly as you can. The word purpose added something essential. Purpose highlights that you should not be reckless in your pursuits, and it further suggests that you could act thoughtfully at the same time.
We believe this is exactly how our client base should act towards the technologies and changes that relate to the 4th Industrial Revolution. Our clients should dive into these technologies now, while ensuring that as they implement the changes they are taking the proper precautions, and putting into place the proper controls that will continue to protect their businesses from crucial errors.
Applying the Technologies to our Industry
One key technology Artificial Intelligence (“AI”) is critical to our industry. AI has been a large focus on many funds for several years now.
Whether it be the Investor Relations group using predictive analytics to identify the best investors to pursue, or the front office using prescriptive analytics to draw up specific recommendations in investing you can’t deny the value of these technologies.
Lessons from Data Warehouse Experiences
The biggest barrier to getting on these technologies was the cost and time to set them up. Over the past decade, many clients engaged FinServ in discussions about creating data warehouses. Less than 10% of those clients actually took any real steps to create them, and far fewer ever realized the final goal or benefits.
Thanks to SAAS-based solutions and virtual computing new AI engines are popping up all over the place. These solutions offer a very low-cost entry to powerful AI engines. Microsoft, Salesforce, and SAP just to name a few vendors offering AI platforms that can be acquired and setup in weeks or months.
We strongly suggest before selecting one of these platforms that you do conduct a full vendor selection. Like all system selections ensuring you are picking the right solution that fits your specific requirements is critical. Each of these AI platforms do have their own strengths and weaknesses and aligning those to your business is paramount. As part of this selection process we endorse vetting the security and controls provided by each of these vendors.
One Real World Example
Up to this point we have spoken about why you should adopt new technologies and spoken to most of the reasons firms hesitate to act. Providing an example how a technology today can enhance one common pain point may be the best way to bring people over to adoption.
From the dawn of computerization the dependency of getting users to enter their data into the system has been a large issue. Now with our smartphones we have a device that when combined with AI technology can alleviate that issue. Salesforce introduced Einstein Voice which leverages your voice allowing you to dictate important notes into your smartphone and the AI portion of this solution than intelligently identifies the components of your data and links that to your CRM / sales system as an example to route your information intelligently to those people in your firm who need to act on that data.
The Bottom Line
New technologies are arriving at our doorstep with regularity and speed we have never seen before. Knowing which ones to choose and how to safely and effectively implement them can be daunting. You should not let security concerns hold you back from ensuring your fund can compete for investors who are becoming more savvy and discerning about their choices of funds. If anything adopting these new tools will ensure they see you as an innovator worth investing in.
FinServ can help you plan for and implement these technologies in a safe and effective manner with time tested methods and the speed required to have you up and running in the most expedient time possible.
To learn more about FinServ Consulting’s services, please contact us at email@example.com or (646) 603-3799.
About FinServ Consulting
FinServ Consulting is an independent experienced provider of business consulting, systems development, and integration services to alternative asset managers, global banks and their service providers. Founded in 2005, FinServ delivers customized world-class business and IT consulting services for the front, middle and back office, providing managers with optimal and first-class operating environments to support all investment styles and future asset growth. The FinServ team brings a wealth of experience from working with the largest and most complex asset management firms and global banks in the world.