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Julius Baer On How Tech Changes Role Of Wealth Advisors

Tom Burroughes, Group Editor , 7 October 2019


As part of an interview series, this news service talks to the Swiss bank about its view on how technology affects how advisors work.

A big debate recently has been whether tech, such as artificial intelligence, is going to either replace people or make them more effective, or possibly a bit of both. What in your view is the likely outcome? 
On a more general level, AI has the potential to displace humans due to automation – however, it is also creating a number of new jobs, take the example of the rising need for data-scientists. At Julius Bear, we have implemented a “future-skills upgrade programme,” where our employees can assess themselves against what we believe to be the skillset of the future. Based on the results, we offer various training programmes to pro-actively close these gaps.

How can tech help advisors deal with issues such as foreign languages, certain sources of news, KYC background checks and ongoing monitoring, checks for red flags regarding money laundering? Are there examples you can give?
Advanced algorithms are, for example, incredibly helpful when trying to detect and prevent fraudulent payments, new attack vectors in cybersecurity, or market and data anomalies, among others. 
We see different levels of maturity driven by the (un)availability of data. Take payments for example - there are enough data to allow algorithms to detect unusual patterns (fraud, AML) with statistical relevance. These systems are very mature. 

However, the situation with regard to personal KYC information is different. Whilst background checks, negative news searches and other more general information can be sourced and evaluated automatically, the availability of useable data-sets in terms of quality and size prevents mass automation when faced with more individualised questions on KYC.  

Do you see different levels of tech adoption by advisors of varying ages and backgrounds? Have you seen any specific trends?
We see different levels of adoption by advisors, however we are yet to see any clear patterns. You may find very seasoned private bankers using technology in the same way our children do, and younger colleagues not using it at all. However, one can observe that the general level of tech adoption is rising. We may find a correlation between a client’s take on technology and that of their advisor - since long lasting relationships are normally based on shared values.

No conversation about tech can be complete without addressing cybersecurity issues. In your case and that of your organisation, what training should advisors receive to avoid being hacked and to protect their clients? What sort of threats particularly concern you? What sort of training do they receive and should they receive?
Cybersecurity attacks have become more sophisticated and phishing attacks or Ransomware have become much harder to detect. 

Technical defensive precautions are a must for financial institutions. However, it is crucial to continuously train advisors to identify security issues, such as fake phishing emails, via regular drills to equip them with the tools they need to keep their clients and the business safe and secure. 

Have you found it easier to illustrate reports and situations to clients as a result of tech.? Does it make it easier for advisors to work out “in the field” than before?
Of course, automation has significantly improved our client reporting, but the bigger change is yet to come. In the past, there was usually an identically structured report for all clients. Now, we have modularised reports that fit the needs of each individual client. At some point in the future, each report could be even more personalised - yet produced automatically.

In five or ten years’ time, in what ways do you think the role of advisors will have changed and to what extent will tech be the reason for that?
Our clients want to concentrate more and more on their core businesses and family affairs. At the same time, they feel increasingly uncomfortable with regards to the question of whether their total-wealth is being protected – let alone if it generates returns aligned with their sustainability requirements. This is why we are seeing the re-emergence of trust. Our clients are looking for a person whom they can trust and discuss all wealth matters.

Here, we will see technology used to help advisors support their clients through applications such as “augmented banking”. To permanently deliver the best option, advisors will rely more and more on systems and business networks to find, evaluate and structure their offerings. 

Key technology to deliver such personalised yet scalable offerings will emerge out of AI – more precisely in the sub-field of machine learning. A second key technology enabling scale is the availability of very secure cloud infrastructures, accessible through protected APIs. The opportunities provided by technology, combined with the unique traits of human beings will offer much more positive results than downsides. And yes, in the beginning, it will be necessary to be courageous in taking steps in unchartered territories, but it will be worth it.

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