Articles related to robo advisor, online wealth management. automated investment advisors, investment management, digital investment advisor.
The event was organized by CFA Society Poland. The main media partner was the newspaper “Puls Biznesu“. The conference was divided into a series of lectures and panel sessions with the participation of nearly 250 experts from Poland and abroad.
This year’s event began with the presentation of the results of a survey commissioned by CFA Society Poland. The survey was run on a sample of more than 500 financial professionals and its subject was knowledge of fintech issues.
Its results indicate that, when asked about their knowledge of the use of new technology in the financial industry, only 31% of respondents responded that it was very good or good. The vast majority of respondents (40%) said that they were “neither well nor poorly” acquainted with the topic.
In the first part of the conference, the speakers focused on what the opportunities and risks the fintech revolution presents, especially for companies and managers dealing with traditional investment advice.
– According to a survey conducted among top experts, they absolutely do not see the threat. Almost 80% think that fintech is not a problem for them, because they are good enough that when conditions change they will adjust and win. On the other hand, for less developed professions that do not require creativity, it is indeed a threat, because these professions will disappear. The ones which stay will be specializations that require creativity, an analytical approach and communication skills – explains Krzysztof Jajuga, President of CFA Society Poland.
The next part of the conference was dedicated to robo-advisory platforms. The panel discussed the difference between fully automated models and hybrid solutions. It was attended by Empirica S.A. CEO Michał Różański, who noted:
–There is space for a whole spectrum of advisors on the market – from traditional to fully automated models. Today, in a rapidly changing world, it is hard to predict how the accents will be distributed. Since now 1 percent of the population uses financial advisory services, there is a problem with supply/the problem lies with the supply, because it pays off for advisors to advise only the richest . This is the space for automated consultancy.
The founder of Empirica believes that the entrance of the generation of millennials in the market, increasingly eager to use AI-based (artificial intelligence) solutions, will especially be the impetus for the development of fully automated advisory platforms, which, using a well-tailored user interface, will allow customers with lesser resources to engage more on the investment market. Which, he added, should lead to its greater democratization.
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On 26th of October 2017, the “Trading CEE: Equities and Derivatives” conference took place in Warsaw. This is one of the most important financial industry related events in Central and Eastern Europe. The co-organizers of the event were the Warsaw Stock Exchange, the Global Investor Group and the National Depository for Securities. Michał Różański, CEO of Empirica took part in a panel devoted to the future of the fintech industry.
The Trading CEE was held in Warsaw’s Hilton hotel, where several hundred capital markets experts had the opportunity to talk about such important issues as the Mifid II regulation, or the scale of the fintech revolution in Poland and internationally.
They also discussed the decision made recently by FTSE Russell (the supplier of indices belonging to the London Stock Exchange group) to change the status of Poland from that of an Emerging Market into that of a Developed Market and considered the significance of this shift for the national economy.
Among many of the excellent speakers, we had the change to listen to Marek Dietl, President of the Warsaw Stock Exchange and Toby Webb, Head of EMEA Information Services FTSE Russell. The inaugural panel on the opportunities and threats facing investment markets in our region gathered such experts as Ales Ipavec, head of the stock exchange in Ljubljana, Richard Vegh from the Budapest Stock Exchange, Ivan Takev, head of the Bulgarian Stock Exchange and Head of International Sales of the Moscow Stock Exchange Tom O ‘ Brien.
Fintech Innovation Forum
The panel regarding the fintech industry was very popular among visitors, especially the topic of the development of tools based on artificial intelligence and their impact on investment markets in Poland. It was organized in such a way as to allow for 4 of the most promising Central & Eastern European companies in the modern financial technologies industry to present what they offer. One of the main participants of this part of the Trading CEE conference was Michał Różański, CEO and founder of Empirica, the fintech software house.
During his speech, he focused mainly on the presentation of innovations in the field of robo-advisors, which are already revolutionizing the global investment market.
– The robo-advisor platform is not only the future, but the present of wealth and asset management. Our Empirica Robo Advisor service stands out in the international market above all through its very high level of support for advisors in their work with the service’s users. All this is thanks to solutions in the field of AI analytics, which allows them to receive a full picture of the actions taken in the user profile and to quickly respond if these actions threaten the assets, which in the end also reduces the risk of losing the customer. Another important element of our consulting service is the fact that we have built it based on the strong foundations of our platform for Algo Trading. Thanks to it, our robo-solution has fully automated access to the data stream coming from the most important financial institutions at every stage of the Empirica Robo Advisor process. – explains Michał Różański.
New generation of users
Platforms from the robo-advisor category not only democratize investment opportunities, but also reduce the price of consultancy services. In an era of technological revolution, a millennial generation is slowly entering the capital market- people accustomed to continuous presence in the online world. Advisory platforms will enable it for them. Friendly user interfaces, notifications that they know from social media and an automated transaction system based on a personalized portfolio are already present in the fintech area. However, in order for these tools to function in such a complicated environment as the financial market, powerful computational engines based on artificial intelligence (AI) must be behind them. Empirica helps financial companies enter this world by providing an advisory platform that automates the asset management processes and is based on innovative solutions in the field of data processing. – adds the CEO of Empirica.
Empirica is a Wrocław-based company that offers services such as an Algorithmic Trade Platform implemented with successes on the Warsaw Stock Exchange, solutions from the category of fully automated advisors (robo-advisory platforms) and software built on the basis of blockchain technology.
Project Innovate and it’s move to improve Financial Technology (fintech) across the industry has had a very positive reception across the UK. What project innovate initially set to achieve, was to tackle regulatory barriers to allow firms to innovate in the interest of consumers.
As part of Project Innovate, Financial Conduct Authority (FCA) launched the Advice Unit. The Advice Unit is a special support unit focusing on models that provide a ‘personal recommendation’ or ‘discretionary investment management’ for their clients and particularly on automated advice models, including fully or partly automated online advice.
To apply and receive regulatory feedback from the Advice Unit, firms need to demonstrate how their model meets Advice Unit eligibility criteria. In that regard FCA sets out a schema of negative and positive indicators.
Among the positive indicators, the Advice Unit strongly encourages firms to model their service around those consumers who do not have significant wealth or income. Their models should have the potential to deliver lower cost advice to unserved or underserved consumers. Moreover They will need to be able to demonstrate that they offer a genuine consumer benefit.
Additionally firms also need prove that their model is an automated advice proposition. FCA’s website for this matter states firms who wants to qualify for regulatory feedback, should have a system that the “core element(s) of the customer journey is automated. This may include some of the following: collecting fact find information, collecting underwriting information, conducting customer risk profiling, undertaking a suitability or appropriateness assessment, identifying suitable debt options, etc.”
Firms that meet the Advice Unit eligibility criteria are given regulatory feedback on their model. This could include:
- an initial meeting with the Advice Unit, and other specialist areas of the FCA if needed, to discuss the proposition
- for firms requesting ongoing engagement, a dedicated point of contact in the Advice Unit to provide regulatory input at agreed milestones
- specific feedback on the regulatory implications of the model – this could include follow-up meetings with relevant FCA staff to discuss specific issues, informal steers, and individual guidance as appropriate
- input on how to apply for authorization if the firm is currently unauthorized
Empirica proudly presented the technology for Robo-Advisors; How to build great software behind your Fintech service at Cloud Expo 2017 in Manhattan, New York.
The event was from 6th to 8th of June 2017 at Javits Center in New York City, where panels were hosting star speakers from Silicon Valley to Wall Street. The event was focused on Fintech, Cloud Computing, Artificial Intelligence, Cognitive Computing and other hot technology fields and topics. There was a tremendous turn out to Cloud Expo 2017. The event was honored to host speakers and audiences from around the world. Global leaders in technology such as Amazon Web Services, IBM cloud, DEll EMC and financial industry giants like Accenture and Deloitte, together with successful companies and brands around the world , brought the latest trends of technology in one place.
Mr Michal Rozanski, Empirica CEO and board member of EARP Integration used his 35 minutes on stage, introducing new technologies in Robo-Advisory arena. Mr Rozanski, show cased Empirica’s newly built Robo-Advisory platform to express the importance of fine technology in automated wealth management solutions. The speech carried on with Mr Rozanski, explaining the maturity Empirica gained facing challenges during development of a modern Robo-Advisory platform from scratch. The session was concluded with Mr Rozanski give away on informing the essential factors of developing a software behind a Fintech service, and answering the ‘HOW’ for those intending to build such applications.
Moreover, visitors and audiences could meet Empirica representatives at their dedicated booth at Cloud Expo, where they could ask and discuss deeper and in details about the technology behind Fintech services as well as the technology behind Robo-Advisory.
According to Accenture report, “The Global Distribution and Marketing; Consumer Research”, more consumers would welcome Robo-Advice services to manage their banking, insurance and retirement. The survey that included nearly 33,000 consumers in 18 countries and regions revealed that the majority of the consumers are willing to accept exclusive “robo-generated” advice for certain banking, investment and insurance products.
71 percent of respondents to this survey are open to get robo-advice to assist them in the bank account selection. Approximately 78 percent of the consumers surveyed would allow Robo-Advisors to give them investment advices. Finally, nearly 68 percent of the respondents would authorize their retirement planning to be led by Robo-Advisors.
The statistics behind this report expose an astonishing range of recognition and acceptance of these automated advice tools among people.
Plausibly Millennials are the main reason for this vast acceptance, the group that is about to reach their prime spending years. The economy is in their hands and the market will shape around their interests. They are digitally aware and prefer to perform their transactions online; commonly they do trust machines. This digital native generation might not currently have the highest assets among all generations, but the increment rate of their assets is predictably the highest. Though Millennials are not the only fans, surveys show a wider range of acceptance among retirees and general investment believers as well.
Pragmatically speaking, this range of acceptance promises more banks and financial firms to open their doors and to use Robo-Advice tools.
Genuinely the current (traditional) approaches to some of these operations (banking, insurance, et cetera) are not only costly but also rusty. Transparency, unbiasedness, time, are only some of the undeniable advantages of Robo-Advisors over the traditional style. This has fueled many firms already to incorporate this technology in their systems.
Although the common goal for those firms which focus on Robo-Advisors is ‘augmentation’, innovation remains a key separator.
Robo-Advisors introduce new features to continuously fulfill their clients’ needs and to stay ahead of their competitors, for instance in January 2017 Wealthfront reintroduced “Selling Plan”. Selling Plan is an improved and automated process of selling concentrated stocks. It intends to diversify the portfolio more efficiently. Interestingly, the service which usually is available for executive accounts, was made accessible for all users with commission free regime. Moreover, Selling Plan prioritizes selling shares with lower tax rates.
Furthermore in this competition, we have witnessed more use of AI in Robo-Advisors.
Hedgeable’s “tax samurai” called Katana, an AI based tax management service designed for high net worth investors. This smart tax management feature will not execute any selling, unless it is tax efficient. Moreover Katana makes intelligence decision weighting tax efficiency with downside protection. Additionally Katana will automatically harvest losses for optimal tax alpha. Additionally this AI driven tool will provide tax-smart aggregation and tax friendly trading.
In summary one of the largest generation in the history is approaching its investing time; they understand, and they do welcome automation. What is specific to this group is its appreciations of fast and impactful tools, the features that Robo-Advisors use as their slogan. On the other hand there are new technologies introduced by Robo-Advisors and FinTech firms, especially more involvement of AI in order to smarten and shorten procedures. Additionally Robo-Advisors are more and more affordable.
These reasons together convince us of there will be upcoming increase of transformation to this technologies as well as more demand from the investors.
Empirica takes part in Cloud Expo in June 6-8, 2017 in New York.
Cloud Expo offers a wide selection of more than 120 technical and strategic Industry Keynotes, General Sessions, Breakout Sessions, and signature Power Panels. Durnig the FinTech Session we will present own advanced Robo-Advisory Platform and our experiences we have gained for over 6 years of developing solutions for financial institutions and FinTech companies, including robo-advisors. We will illustrate the most important issues of building tailored FinTech software. We’d love to welcome all FinTech innovators interested in how properly implemented technology can move their businesses forward.
Empirica has announced the development of brokerage solutions for MetaTrader 5. Our company has become the institutional software provider for companies using the advanced multi-asset platform. More brokers actively switching to MetaTrader 5 generate a demand for applications expanding and complementing the platform features, while tech service providers as Empirica strive to satisfy this demand by pushing further the development of the platform and its infrastructure.
“For the last 6 years we have strengthened our market position as leading software partner for financial institutions and FinTech companies. We have developed a very strong algorithmic engine, that has already made one of our customers the fastest market maker on Warsaw Stock Exchange. We are pioneers in developing intelligent robo-technology based on machine learning. Now in cooperation with MetaQuotes we will support brokerage firms and investment companies in MetaTrader server extensions that will meet their specific requirements and needs in relation to the forex market. The customers of MetaQuotes can benefit from our ability to combine the high technical expertise and deep industry knowledge of our team”, — says Michal Rozanski, CEO at Empirica S.A.
Customers who have already benefited from strong competences and experience of Empirica are Warsaw Stock Exchange, Credit Agricole, brokerage firms and robo advisors like BOS Bank, InvestHelp and Swissborg. Empirica is headquartered in Poland and set up international units in Germany, the Netherlands, Finland and Switzerland.
Most financial advisors are in a state of denial about robo-advice. They say clients value the human touch or need real people to understand the nuances of their financial lives. They’re wrong. Soon robo advice will be much more efficient than human advice ever was. The next step in wealth management is to get rid of it’s weakest and costliest part – the human advisor.
In this article we would share the results of our analysis on most important areas where appliances of Machine Learning (or marketing term – Artificial Intelligence) will take wealth management to the next level. Those areas include:
- ML in behavioural analysis that tracks typical investors mistakes and reacts on nervousness, not thought-through decisions, spontaneous reactions to market downturns etc. Contact the investors when they really need explanation and support.
- Sophisticated portfolio allocation and rebalancing backed by algorithmic trading and execution algorithms
- Real time adjustments in investment strategy (change in goals, life situation, job, location, marital status, remuneration) on finest level, that human advisors could not deliver
- Combination of long term advice with ML analysis of current budget status (with integration all bank accounts) and spending and saving practices. The result would be high level plans combined with help in everyday execution.
- Chatbot and voice technology – explaining the investment strategy and current market situation in most natural manner.
- ML in in analysis and navigation of tax nuances
Implementing those AI functionalities in robo advice systems will be important step on the way to delivering more financial freedom. Professional advice, available to anybody, especially to those who can’t afford it now, but need it most. At friction of the current costs.
AI is beating humans in chess, go and recently even in poker. Now it’s time for a financial planning game. And these are not bad news, but not for the financial advisors but for the customers.
If you want us to elaborate on the topic of using Machine Learning in Wealth Management please vote for us to be part of incoming WealthTech Book:
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