Innovation hubs, and the ideas they develop, have the potential to change all aspects of the financial services sector — including how financial advisors do business.
For example, Toronto-based Royal Bank of Canada (RBC) launched its MyAdvisor hybrid platform this past March, which was first conceived at one of the bank’s innovation hubs. The platform allows the bank’s financial planners to work with clients virtually through screen-sharing technology and video chat.
RBC’s network of innovation hubs are now focused on exploring ways that technology, particularly artificial intelligence (AI), can help its wealth-management division. AI is an area of computer science that focuses on computers simulating intelligent human behaviour.
One branch of AI research that may prove useful to wealth management is natural language processing, which is the ability for a machine to understand and generate natural language. Typing key words into a search engine is a basic level of natural language processing.
More sophisticated AI, however, can understand and analyze entire documents such as articles and reports. AI tools could then summarize that information or point out the most important details for an analyst to read.
“It’s stuff like that, that you can think of as being a pretty powerful tool for analysts and investment advisors [as well as] portfolio managers and stock pickers,” says Gabriel Woo, vice president of innovation with RBC.
Another potential AI-based application for wealth management includes recommendation tools. For example, much as Netflix recommends which TV show or movie viewers should watch next, AI can suggest to advisors what products or services clients may be looking for given their interests or risk profile.
Toronto-based Canadian Imperial Bank of Commerce (CIBC) has explored such ideas for its branch-based advisors. Last year, CIBC’s innovation hub at the MaRS Discovery District ran a “sprint” (a short timeframe in which the innovation team brainstorms ideas and creates a prototype) called “the future of digital banking.”
That sprint experimented with ideas as to how technology tools could provide advisors with information about a client during a meeting, including notifications about relevant services or products.
“Has that led to anything? Not really,” says Aayaz Pira, senior vice president, CIBC digital, retail and business banking. “But we’ve developed a proof of concept that led to what the future can look [like] if we empower our frontline with really great digital experiences.”
CIBC’s innovation team is currently running a sprint to look at technology tools that can help investment advisors in the bank’s wealth-management division meet clients’ evolving expectations for how they interact with the bank, and to deal with the industry’s changing regulatory environment.
In some cases, adapting to change is more about improving the proverbial wheel as opposed to inventing a new one. For example, teams at Toronto-Dominion Bank are looking at how to enhance the mobile technology available to staff and teams at Toronto-based Manulife Financial Corp. are focused on improving the overall digital experience for customers by experimenting with new digital apps and other methods for clients to interact with the company.
“There’s a lot of that happening in the labs and I know it’s not as shiny and kind of out there [as blockchain or AI],” says Xavier Debane, vice president, innovation and business development, strategy at Manulife, “but it’s the core of what we do.”