2016’s TSAM New York saw a wealth of asset managers from a vast range of different companies discuss the most burgeoning technology topics at the moment. The day was headed up by an open panel session on the importance of innovation within traditional financial industries. Rohit R. Katti, Director and Chief Technologist, Strategic Technology Investments Group, New York Life Insurance Company and Bob Bonomo, CEO, Blockchain Innovation Group, LLC spoke on this subject.
With innovation and automation comes anticipation and disruption, and financial professionals should be prepared to learn and adapt to changes that will inevitably improve business in the future. Alongside this, the responsibilities of employees will also change because using systems and software to do their jobs would be less of a cost to the company, but hopefully this evolution will be a steady and stable process and not encourage even more disruption than is predicted.
Katti highlighted that embracing new technology is all about having a different perspective and keeping an open mind. “The approach that we should be taking and what we have found very effective is a liberated approach to development. When we have a new technology and we want to apply it to our domain, I think the best method to take is to start from scratch and maintain a fresh perspective to see how processes work today. Then, it is important to reimagine the processes in the realm of the technology that we are applying it to and then go onto to build the systems. This way you get the maximum leverage of application and effectiveness of that particular technology,” Katti said.
Using a process like this helps keep unstable disruption at bay during a time when change is happening more rapidly, as well as an increased number of people being trained in entrepreneurship and system integration. Some companies are anxious about technology taking over but in reality, we cannot predict the outcome of new systems emerging and being implemented as we enter into the era of hybrid intelligence and move away from the human. At this year’s TSAM Europe, David Wood, Chair of London Futurists, had a similar attitude.
“How can we divide up the tasks so the automatic parts can be as comprehensive and widespread as possible and then dovetail in at the right moment to the parts where humans can add some unique sparkle and perspective? That unique sparkle and perspective is going to be changing, and so the recipe for the best cooperation in 2 years’ time won’t be the best recipe in 10 years’ time. And the only way companies can thrive in this is by being agile. Being stuck in your ways is not going to cut it anymore. Companies need to be able to throw away the successes of the past to be relevant to the challenges of the near future,” Wood said.
It must be said that if humans were questioned, they would not wholeheartedly state that they trust a fully automated service more than one where a human would advise them. In the same way, human perspective is needed when making strategic decisions that will ensure the agility of businesses and remain relevant. Katti continued to say that we should keep the same attitude but not use old processes when implementing new technology, you’re not getting the most out of the new technology this way.
“Innovation is not a part time job. The way we approach it is to be a little segmented from the mothership and that way, we can get focus on a full time basis on all that we have and also take a closer and fresher perspective on processes that are done in a similar way. This is how we apply the new technology; if we were to map our existing processes onto the new systems, we would not get the full leverage of the product,” Katti said. Wood used the analogy of the smartphone to explain this theory as people have got used to completing tasks on this device, but this does not mean this is what they will use in years to come.
“This is not a fixed thing, there’s a better interface ahead, it’s an interface that’s going to be in your field of vision all the time. It’s going to be called smart glasses and it’s going to be a combination of what we see from the actual reality, augmented with what we put on top of it. Today, an important mantra for people delivering services is “think mobile first”. Don’t think about delivering something for a big screen then squashing it down to mobile as a second rated experience. That’s fine for now, but in 5 to 10 years, the new design mantra is going to be “think glasses first”, as many people will be wearing glasses.”
Bob Bonomo explored how innovative change can also be formed with a repackaging of the organisation’s voice. “In my experience, firms repackage voice in order to inject forward thinking into the organisation in a three step process. First, is the carving out of the organisation, where especially in the financial services space, innovation labs are created where practices can be set out and goals can be scaled fast. Second is to sort of inject startup or entrepreneurial talent into the organisation with the objective of moving forward and last, the ability to highlight that embracing of change is part of the corporate DNA.
“This means that people are not afraid of change or to lose their job and that is a positive. Whether that means moving towards a distributed ledger technology, virtual reality or whatever you want to call the future pathways, those are the three processes that I have seen being undertaken by corporates recently,” Bonomo described. Picking up on the second point, Katti mentioned that in his organisation, they are looking for innovative problem solvers, but a formal agreement isn’t the only way an individual can make an impact, just knowing people in your networks could make a big difference.
Bonomo explained the evolution of innovation in the technology industry – from mainframe to PC to the Internet to social media – and calls blockchain and distributed ledger technology, “the fifth wave”. Both panellists spoke about how trust is still considered an important factor when corporations implement new technology and we, as an industry, underestimate how much and rapidly global tech changes.