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Clara Shih to Discuss the Impact of Automation at Fortune Brainstorm Tech 2016 (#FortuneTech)

Artificial Intelligence HeadshotsHearsay Social CEO and founder Clara Shih (@ClaraShih) will join Adam Nash (@AdamNash), president/CEO of Wealthfront; Sallie Krawcheck (@SallieKrawcheck), CEO/co-founder of Ellevest; and Aydin Senkut (@ASenkut), founder/managing director of Felicis Ventures, for a lively discussion on the impact of artificial intelligence at 2016 Fortune Brainstorm Tech (@BrainstormTech) this week in Aspen, Colo.
Other scheduled conference speakers include Robert Iger, chairman/CEO of The Walt Disney Company, Chuck Robbins, CEO of Cisco, and Reshma Saujani, CEO of Girls Who Code.
Clara’s panel, titled “Artificial Intelligence: Can a Machine Make You Millions?” and moderated by Fortune assistant managing editor Adam Lashinsky (@AdamLashinsky), will address the current and future influence of automation on the workforce. Are machines better than humans when it comes to work? Why not both? Cognitive systems are bringing new levels of automation and productivity to a broad range of fields, from financial services to manufacturing. The panelists will discuss how these emerging technologies will change how consumers buy, businesses operate and investors fund companies.
As witnesses to how technology and big data are changing workplace fundamentals at lightning speed, the topic of automation and robots versus (or co-existing with) humans is a hot one, with sweeping cultural and social implications for both the current and future generations. Most recently, global consulting firm McKinsey & Company published initial conclusions from research on the degree to which automation will replace work activities performed by humans across a multitude of industries. Check out the full article from McKinsey, “Where machines could replace humans – and where they can’t (yet),” and a summary published in Fortune.
Follow the Brainstorm Tech feed for live coverage of the event and #fortunetech on Twitter!
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How Firms Will Reach Next-Gen Investors

shutterstock_156997538The way consumers interact with service providers—whether retail, health care or banking—has profoundly changed from just five years ago. Even in heavily regulated industries like financial services, digital disrupters have drastically altered the status quo, forcing companies to rethink traditional business models in light of new digital entrants and shifting client expectations. From robo advisors to new regulations, millennials to baby boomers, new developments are making clear that the ways of the past are no longer the keys to success in the future—or even today.
The urgent necessity of firms and their employees to adapt to the changing expectations of today’s always-connected consumer was a key theme at Hearsay Social’s recent Innovation Summit in San Francisco, which focused on the transformative changes taking place within the financial services and insurance sector, as well as the challenges and opportunities that lie ahead.
To stay relevant and succeed in the face of such profound changes, here are five things to keep in mind:

1. Financial technology is an evolution, not a revolution.

The phenomenon that is happening in financial services is an evolution, rather than a revolution, according to Naureen Hassan, the chief digital officer at Morgan Stanley, in her opening remarks on the future of wealth management. Amazon and Google have set the bar for what consumers now expect and demand. These new consumer expectations do not mean that traditional wealth management firms have to completely change course, but they need to evolve.
Consumer trends that started in retail are now clearly affecting regulated industries like financial services. For example, mobile now accounts for 21 percent of all transactions at Starbucks. Allowing customers to order via mobile before picking up their drink moves people through lines more quickly, but still allows for personalized customer experiences. Consumers expect to have access to certain information and activities through their phones, but that doesn’t mean that human interaction is going away. Leading financial firms are exploring similar practices and next-gen tools, and may look to retail leaders like Starbucks for ways to enhance customer experiences.

2. Skate where the puck is going.

This should come as no surprise, but following the money is always a good strategy. There is a lot of buzz in the industry about robo advisors and digital-direct financial products, but those channels only capture a small portion of invested assets. The 10 leading financial advisor channel firms still tout more than $13 trillion assets under management, compared to $250 billion for robo advisors. Focusing on capturing the generational transfer of wealth is a much bigger opportunity. As Chip Roame of Tiburon Strategic Advisors points out, baby boomers, who still hold the majority of America’s wealth, will liquidate some portion of the $59.4 trillion in retirement plans, personal assets and small businesses they currently control. A significant portion of this money will go to the current millennial generation, and getting in touch with them now is essential.

3. Know your next generation of clients.

Financial planners and advisors looking to reach this next group of investors need to know that millennials have already taken the mantle as the largest portion of the American population, and just last year became the biggest part of the American workforce. This is quickly creating a lot of new client opportunities, but firms will need a refined understanding of how to meet the unique needs of this growing demographic, as my co-founder and CEO of Hearsay Social Clara Shih has shared.
Moreover, what financial professionals may not know is that despite their digital dispositions, most millennials still crave face-to-face interaction with an advisor, just like their parents before them. However, millennials also expect those advisors to be digitally savvy. Having a strong online presence and communicating through a variety of digital channels is imperative. Digital technology is not just a disrupter, but also an enabler, opening doors for advisors to have the same human interactions with a younger generation.

4. Digital technology is not turn-key.

Simply opening new digital channels of communication for customers is not enough. You have to put in the effort to actually engage with customers where they want to interact. Kenneth Lin, founder and CEO at Credit Karma, demonstrated how his company conducts all customer interactions online, with no cold calls and no physical touchpoints. While this may not be the right approach for other financial services professionals, it certainly shows that communication will often originate online.
Today, customers expect to find and hear from you exactly when, where and how they prefer: on social media and mobile devices. Millennials are even more likely to share their experiences on social media. As a result, firms that fail to provide desired communication channels for their advisors to reach their clients—like text messaging—puts firms and advisors at risk of being left behind. Amitabh Jhawar, COO of Braintree, said his company uses social media data to inform risk modeling.

5. Financial services are being unbundled.

The primary driver of disruption in financial services is deconstruction of the one-size-fits-all product, according to Jon Sakoda, general partner at venture capital firm New Enterprise Associates. This unbundling allows new entrants to disrupt large incumbent firms by offering specialized, niche services at scale. To compete, traditional financial organizations must offer faster, more efficient services while playing to their “human” strengths. High tech but also high touch is how to win in today’s marketplace.
The undoubted winner in the digital evolution of financial services is the consumer, who will have a wider array of options at cheaper prices. If there are any losers, it will be those who fail to put forth the effort to arm themselves with digital technology to meet the needs of the always connected consumer.
This article originally appeared in Wealthmanagement.com. 
Follow the conversation at #HearsaySummit.

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5 Things Wealth Managers Must Do to Thrive in the Digital Age: Insights from the 2015 World Wealth Report

The rise of new technologies, as well as the evolving needs and expectations of high net worth individuals (HNWIs) – especially those under the age of 45 – has given much for wealth managers to ponder and, more importantly, act upon over the next several decades. According to this year’s World Wealth Report released by Capgemini and RBC Wealth Management, wealth managers must adapt to meet the challenges of an evolving landscape or risk lower client satisfaction levels.
New digital entrants such as “robo-advisors” and direct channel platforms will impact the wealth manager’s role in the coming years. The report highlights the need for delivering a differentiated value proposition, and offers things wealth managers must do to stay ahead. And while some forward-thinking financial services firm executives realize the importance automated services will play in asset management, there are some wealth managers who are skeptical. The below figure highlights select quotes from wealth managers and firms regarding automated advisory services:
Screen Shot 2015-07-30 at 12.05.09 PM
Given that two-thirds of HNWIs are likely to leave firms that do not allow them to transact digitally, as last year’s World Wealth Report pointed out, it is critical for wealth managers to embrace digital technology. This will require them to adapt their models and reevaluate their value proposition, including addressing the needs of a considerable number of new clients that hail from the millennial generation.
Below are five ways wealth managers can meet the needs and concerns of today’s digitally-enabled clients:
1) Deliver differentiated value to address the needs of a diverse client base
Wealth managers must understand how to best engage with complete households – from children and spouses to parents and grandparents – and they must do so by effectively using technology to stand out from the crowd. According to the report, providing a differentiated value proposition, including the “adoption of next-generation tools, such as social networks and digital aids, to facilitate communication” will be important.
2) Engage clients and prospects across multiple channels
The report highlights how traditional modes of communication between HNWIs and firms have evolved from face-to-face interactions to omnichannel experiences. We’ve spoken on the need for a consistent, personalized multi-channel presence before and believe seamless, consistent customer experiences that drive personalized communications across channels, such as digital, is imperative in a world of automated consumerism.
3) Understand the needs and approaches of younger HNWIs
Wealth managers must get serious about addressing the needs of millennials, which represent a large group of HNWIs under the age of 40 who will significantly drive demand in the digital age (view video below). In the U.S. alone, an estimated $59 trillion is expected to change hands from wealthy baby boomers to heirs, and nearly 70 percent of HNWIs under the age of 45 will conduct most or all of their wealth management functions through digital channels. This will require a strong digital presence to attract and retain younger HNWIs.
4) Invest in technology-enabled investment services from third-party firms to support efficient and cost effective services
In addressing client needs, wealth managers can outsource competencies and efficiencies to third-parties that are “highly complementary” to existing business models, while wealth managers continue to focus on relationship and trust building.
Hearsay Social is named in the report as one such company that wealth managers can leverage:
“One example of a third-party firm is Hearsay Social, based in Silicon Valley. Its Predictive Social Suite technology enables wealth managers to customize content and engage clients, particularly younger clients below 35 years of age, through its social media dashboard and mobile-first websites.  This can further help wealth managers negate the threat of disruptive players in the industry.”
5) Embrace digital technologies to enhance the client-wealth manager relationship
According to the report, successful wealth managers will leverage social, mobile, and digital technologies to enhance overall service delivery and client experiences for a variety of functions, including prospecting, risk management, and wealth planning. And at the end of the day, as  George Lewis, group head at RBC Wealth Management & RBC Insurance, points out:
“The most successful firms will be the ones that reimagine the value they bring to their clients to be more competitive. As firms navigate the changing market dynamics, it’s important that they keep an open dialogue with wealth managers, while developing the tools, guidance and resources to support their success.”
The World Wealth Report from Capgemini is the industry-leading benchmark for tracking HNWIs, their wealth, and the global and economic conditions that drive change in the wealth management industry. View the infographic and download the full report from their interactive website.
Below is a video highlighting the importance of engaging with younger HNWIs.

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For wealth managers in Asia-Pacific, digital, mobile, and social will be crucial to meeting client expectations

The same trends driving rapid adoption of mobile and social technologies in North America and Europe are not only playing a role in Asia-Pacific as well, but they’re actually even more impactful there.
Asia-Pacific Wealth Report 2014
For example, 82% of high net worth individuals (HNWIs) in Asia-Pacific (excluding Japan) expect most or all of their wealth management relationship to be conducted through digital channels in five years, in contrast to 61% of HNWIs in the rest of the world, according to the Asia-Pacific Wealth Report 2014 recently released by Capgemini and RBC Wealth Management. Not only that, but the study found that Asia-Pacific HNWIs across all ages and wealth levels will increasingly demand mobile and social technologies for interacting with wealth managers.
According to Jean Lassignardie (Chief Sales and Marketing Officer, Capgemini Global Financial Services, @jlassig):

“The risk of not getting digital right is high for wealth management firms in Asia-Pacific, as its high net worth individuals are distinguishing themselves as more digitally-minded than their peers in the rest of the world. Asia-Pacific wealth management firms will need to offer a deep, multi-channel experience that takes into account regional variations in order to meet these high expectations.”

Of course, social media is especially crucial to the younger generation. Over half of Asia-Pacific HNWIs under the age of 40 indicate social media as an important channel for their wealth management relationship. The Asia-Pacific wealth manager should share that perspective, especially since Asia-Pacific HNWIs are already openly sharing information about themselves on social networks, which will be a useful resource for the digital-savvy financial professional.
To further explore Asia-Pacific’s wealth management climate and how the digital movement will play a part, download the free 52-page Asia-Pacific Wealth Report 2014.
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