Analytics - Embracing new technology for future business

Every year, companies and individuals generate billions of gigabytes of data. Data, which properly analyzed
and used in time, can emerge as an unbeatable competitive advantage. Enterprises need to recognize the
prospect analytics represents and should adapt their IT strategy to capture such opportunities’. Analytics can help retailers predict buying decisions of shoppers; it can help banks weed out fraudulent transactions; while
governments can use analytics to provide services directly to their citizens. Predictive analytics has also been
adopted across industries in various scenario building activities.

Companies have always kept large amounts of information. While it’s true that the amount of data in the world keeps growing, the real change has been in the ways that we access that data and use it to create value. Today, you have technologies like Hadoop, for example, that make it functionally practical to access a tremendous amount of data, and then extract value from it. The availability of lower-cost hardware makes it easier and more feasible to retrieve and process information, quickly and at lower costs than ever before17. It is the convergence of several trends—more data and less expensive, faster hardware—that’s driving this transformation. The concept of analytics has been around for decades for firms that have been handling tons of transactional data over the years—even dating back to the mainframe era. The world is moving from ‘Traditional analytics’ to ‘Predictive analytics’ and now increasingly towards ‘Prescriptive analytics’ (where the decisions are driven by predictive models using business rules engines to help the companies to decide the “next best action”).

The recent spurt in demand for analytics (as well as big data) can be attributed to two main factors:

Convergence of computing technologies: 
Analytics is the natural result of four major global trends: Moore’s Law (which basically says that technology always gets cheaper), mobile computing (that smart phone or tablet in your hand), social networking (Facebook), and cloud computing. Moreover, traditional data management and analytics software and hardware technologies, open-source technology, and commodity hardware are merging to create new alternatives for IT and business executives to address this next generation of analytics.

Exponential increase in data:
Large volumes of transactional data have been around for decades for most big firms, but the flood gates have now opened with more volume , and the velocity and variety— the three Vs—of data that has arrived in unprecedented ways.

The three V’s of Analytics

A wide variety of data sources are contributing to the analytics revolution:
• Internet data (i.e., social media, social networking links)
• Primary research (i.e., surveys, experiments, observations)
• Secondary research (i.e., industry reports, consumer data, business data)
• Location data (i.e., mobile device data, geospatial data)
• Image data (i.e., video, satellite image, surveillance)
• Supply chain data (i.e., vendor catalogs and pricing, quality information)

• Device data (i.e., sensors, RF devices, telemetry)

Uses of analytics
We are witnessing the use of analytics in multiple industries. Companies are using analytics for
everything from driving growth to reducing cost improving operational excellence to recruiting better
people to completely transforming their business strategy. More recently, national and local governments
across the world have started using analytics for optimizing public welfare programs, reducing traffic
congestion in their cities and fighting crime.

Big Data and analytics in the Indian sub-continent is at a nascent stage, however, the sectors like financial services and telecom have started to adopt these technologies. Also, other sectors including ecommerce are also among the early adopters of the technology to solve the issues of storing as well as creating business advantage from the everlasting data records.

With organizations generating multitude of data from every possible sources, it is paramount to identify which data will be more useful than others. Moreover, some of the data might not even be present inside the traditional boundaries of an organization, and might be available with its customers and suppliers. Organizations need to sift through the gigabytes of data generated every day, and identify the streams of data that can make a difference.

Analytics scenario in India

The usage of analytics is still at nascent stage as far as Indian businesses are concerned. While some industries like banking and telecom have started adopting analytics to get ahead of the competition, several factors have inhibited its growth. India’s largest telecom operator, Bharti Airtel has been one of the foremost adopters of analytics, analyzing usage and charging patterns with the help of predictive analytics. Airtel works extensively with IBM for its analytics requirements. Its latest campaign, 'My Airtel My Offer', is based on customer analytics - every day, the company comes up with a customized plan for its customers based on their usage. It has been most effective with users who hold dual SIM cards and who decide to go with Bharti based on the offer they get on a given day

Beyond Cloud Computing & Mobile Apps: Big Tech Trends

Forget cloud computing and mobile applications — they're so 2010.

So what are the next “wow factor” tech trends, ideas and products that will rock the world of financial advisers and their clients in the not-so-distant future?


Chances are, they will en-compass the wizardry of “big data” algorithms, wearable tech for go-anywhere advisers, video-game-inspired business applications, deep content analysis by supercomputers such as IBM's Watson, and software that has an uncanny ability to read facial expressions and emotions.

In financial services, which was once a leader in technological change, the wow factor is now more likely to come from the consumer market, according to Neesha Hathi, senior vice president of Advisor Technology Solutions at The Charles Schwab Corp.

“Technology used to come through defense and the government to business, and then make its way down to consumers as the cost became more effective,” Ms. Hathi said. “But since the early 2000s, more often the new innovation is coming from the consumer side of the world. As soon as someone marketed the iPad to consumers, they said to themselves, "Wait, I can use this in my business.'”

In an effort to identify emerging technology that will likely have a profound affect on the delivery of financial advice in not-so-distinct future, InvestmentNews talked to some of the best and brightest minds in adviser technology. We compiled a list of five important technological trends that financial advisers cannot afford to ignore.

Ram Nagappan, chief information officer at Pershing, looked at our list and concluded that many of the technologies presented here will change advisers' lives sooner rather than later.

“We feel that the future is already here,” he said.

“We're looking at all these technologies to apply to advisers so we [can] deliver the best experience to them and the end investor.”

BIG DATA

Jeff Bezos, founder and chief executive of Amazon.com Inc., has made no secret of his ambition to collect as much data as possible on affluent consumers so that he can sell them not just books and other media but electronics, household appliances and even groceries.

Amazon's success serves as inspiration to tech teams in the financial services industry, which are studying how to use big-data analytics and statistical probability to better know their customers, including advisers and their clients.

Big data is so big that even the smartest of technophiles have a hard time managing it. This is because it encompasses a huge flow of information about customers, products and services that companies have been gathering for years.

Much of this information, whether collected from traditional or digital databases, has moved into the cloud and continues to grow exponentially.

“With the explosion of big data and analytics, how do you digest all that information?” said Victor Fetter, chief information officer at LPL Financial.

“We believe it's a gold mine — the challenge is that it's moving fast. You have to adapt and create new models,” Mr. Fetter said.

Patrick Yip, director of Advisory Technology Strategy at Pershing, said that one of the first times he truly appreciated how big data works was when he received a Google Now alert on his Android smartphone telling him that commuter traffic was getting heavy where he lived, so if he wanted to beat the rush, he should leave home right away.

“Context is something that knows you and your preferences and location, and then responds to it,” he said.

Pointing to Amazon, which uses big-data algorithms to recommend products based on something that a consumer has previously purchased, Mr. Yip said that Pershing is looking for similar apps that it can recommend to advisers.

SMART OFFICE

The integrated smart office may be more of a designer's dream than a reality.

But in just a few years, advisers can expect to work with wearable devices, office products and even furniture that use cloud technology and integrated software platforms to help facilitate conversations with clients, said Ed O'Brien, senior vice president of Fidelity Institutional's platform technology.

Technology will be less visible as computers disappear into user-friendly hardware, he said, noting that Fidelity has designed an “office of the future” prototype on its Smithfield, R.I., campus that shows registered investment advisers how they will use all that new technology to better engage with their clients.

“You won't see a lot of physical servers and technology infrastructure,” Mr. O'Brien said. “You'll instead see more-collaborative workspaces with lots of mobile technology and integrated technologies.”

Fidelity's office of the future includes a smart coffee table that lets clients sit in a casual office setting with advisers while browsing the web, sharing reports and benchmarking themselves against investment goals.

Tablet presentation-sharing technology, meanwhile, allows for collaborative review of quarterly reports and can be accessed remotely. And a cloud-based virtual desktop for RIAs lets advisers work from anywhere they have access to a web browser.

Improved video conferencing and better gadget management also will catch on in the smart office. For example, the Consumer Electronics Show in Las Vegas in January offered a glimpse of where video is headed, with a Sony projector that can turn an entire wall into a TV screen, and an Intel smart bowl that someday will charge gadgets simply thrown into it.

Wearable technology, too, is headed advisers' way, Ms. Hathi said.

She pointed to Google Glass, the Pebble smartwatch and the Fitbit activity tracker, saying that what seems like a fun gadget will become a valuable business tool.

“We are just now exploring how wearables will be used in wealth management,” Ms. Hathi said.

Fidelity was the first major brokerage firm to make a public foray into wearable technology six months ago when the Fidelity Labs research and development unit was granted early access to Google Glass and created a Glassware app that lets wearers focus their vision on a logo of a publicly traded company to generate a real-time market quote, according to analysts at online and mobile research firm Corporate Insight.

'GAMIFICATION'

Advisers take their work seriously, so the idea of bringing game dynamics into their practices to encourage desired client behavior can make them nervous. But consumer websites and online communities have been using game mechanics to motivate participation and loyalty for years.

Gail Graham, chief marketing officer at advisory firm United Capital Private Wealth Counseling, has used its Money Mind Analyzer to work with 45,000 clients and prospects since 2010.


Money Mind's web app is played as a question-and-answer game by couples to determine whether each partner is most driven by fear, happiness or a need to commit.

The game leads couples to United Capital's Honest Conversation advice program, which comprises about 10,000 retail households, Ms. Graham said.

More participants in the financial services industry are starting to venture into the new frontier of “gamification.”

Investing platform Kapitall Generation, for example, lures investors onto its platform by letting them play with a “fun and easy” $100,000 practice portfolio before trading for real.

In addition, game mechanics are being used by banks to draw in new digitally connected customers, according to Forrester Research Inc.

For example, PNC Bank's “Punch the Pig” game prompts customers to transfer money from their spending accounts to growth accounts.

Closer to the advisory world, custodians are leading the charge into gamification. For example, Pershing, at its annual Insite conference in June, used online game design to educate conference-goers about its NetX360 platform for advisers.

Also, Fidelity Labs has introduced a “Beat the Benchmark” experiment with online gaming in its office of the future's smart coffee table.

SUPERCOMPUTING

International Business Machines Corp.'s supercomputer, Watson, won “Jeopardy” in 2011 because it could sort and analyze vast amounts of data faster than its human competitors.

IBM is actively seeking to use Watson for industrial applications, and the supercomputer is moving into the realm of financial planning.

On a “Watson in finance” web page on its website, IBM states that Watson is being designed as “the ultimate financial services assistant,” capable of performing deep content analysis and evidence-based reasoning to help advisers make informed decisions about investments, trading patterns and risk management.

Jon Patullo, TD Ameritrade Institutional's managing director for technology product management, is positive about this development, saying that he can see the value in supercomputers sifting through massive amounts of data, such as prospectuses, to help drive efficiencies in advisers' practices.

As a further sign of the supercomputer's growth, IBM said Feb. 26 that its Watson Group had launched a global competition to encourage developers to create mobile consumer and business apps powered by Watson.

MIND READING

Mind reading used to be an illusion invented by magicians and tricksters, but in the future, advisers will be able to do some conjuring of their own with voice, mood and facial analytics.

Although mood and facial analytics haven't yet entered the financial services arena, Pershing is using voice analysis, a technology that is catching on at call centers. Customer calls to Pershing are analyzed for empathy expressed by company representatives, silent time on calls and behavioral cues when customers use phrases such as “I'm so frustrated” and “I can't believe this takes so long.”


Beyond voice, cloud-based emotion capture technology now under development uses computer vision to recognize viewers' emotional responses to products and services.

Is the client happy, sad or confused? The software reads pixellated facial features, assessing shapes to infer how a person is feeling.

Already, products such as Affectiva Inc.'s Affdex, Emotient.com, Face.com, Noldus Information Technology's FaceReader and Sightcorp, have arrived on the market to provide companies with consumer analytics based on age, gender, eye tracking, facial expressions, mood and attention level. For example, Sightcorp's webcam eye-tracking software lets companies detect where product users' attention is focused in a controlled lab setting.

Expect to see mood and facial analytics enter the advisory industry in the next five to 10 years, said Oleg Tishkevich, chief executive of financial planning platform Finance Logix.

He predicts that advisers will be able to scan emotional feedback and metrics on how clients are responding to investment proposals or opportunities.

“As the adviser speaks to clients either in real time or on video, the software will read facial expression as they talk about their financial plan, and see if they're happy or sad, and recognize what is and isn't interesting,” Mr. Tishkevich said. “Anything that has a camera, including Google Glass, can be used to read emotion.” 

SMAC technologies in 2014 and beyond

The increasing pace of change is rapidly driving customer, businesses and technology firms in a tight embrace, with the convergence of disruptive technologies eroding the boundaries separating them. Businesses are becoming more and more agile, and technologies such as social media, mobility, analytics and cloud computing are coming together to unleash unlimited opportunities for everyone involved. This convergence – also known as SMAC – will be the leading disruptor to the business-technology ecosystem over the next few years. 


Social media
A social media strategy has become a must for all enterprises, be it banks, retailers or the government. With over one billion individuals logged on to various social networks, people are now using social media for advice on what products to buy, where to shop and even regarding what firms they want to work with. While most enterprises use social media for their customer service function only, many firms have now started using social media in tandem with their sales and marketing functions. This in turn enables firms to use data generated by the customers effectively to service their larger pools of customers.

Mobility
Mobile devices have changed the way people access digital content. Smartphones and tablets have brought rich, digital content to the fingertips of consumers. Mobile banking has emerged as one of the most innovative products in the financial services industry. Shoppers are increasingly using their mobile devices for everything from browsing to comparing to buying products. Governments are also reaching out to their citizens, using mobile devices as an efficient channel. Enterprises must also jump on to the mobility bandwagon, and ensure that their applications are mobile ready.

Analytics
Every year, companies and individuals generate billions of gigabytes of data. Data, which properly analyzed and used in time, can emerge as an unbeatable competitive advantage. Enterprises need to recognize the prospect analytics represents and should adapt their IT strategy to capture such opportunities’. Analytics can help retailers predict buying decisions of shoppers; it can help banks weed out fraudulent transactions; while governments can use analytics to provide services directly to their citizens. Predictive analytics has also been adopted across industries in various scenario building activities.

Cloud computing

The undeniable power of cloud computing to foster innovations and imprve productivity is now accepted by both IT vendors and their customers. While the financial services and government sectors are mostly moving to a private cloud model due to information security concerns, other industries like healthcare and retail have adopted public cloud. Moreover, their existing infrastructure has helped telecom players to emerge as providers of cloud computing, leading to erosion in boundaries between IT and telecom vendors.

Experts predict that the confluence of SMAC -- social media, mobility, analytics, and cloud computing -- will be a potent and leading business-technology enabler of the next decade. They agree that the SMAC ecosystem will have a huge rub-off on IT services. Gartner estimates that India-centric IT services vendors will witness an 8-10% annual revenue growth from SMAC. 

SMAC may provide the much-needed boost for India’s $108-billion IT sector, which has had a jagged growth in the last couple of years on account of global economic challenges, falling consumer spending, and a Eurozone crisis in their main markets. Industry body Nasscom foresees a 12-14% revenue growth in the ongoing fiscal year. The adoption of disruptive technologies could further impel client spending.