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Conversational multimodal interfaces in asset management

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by Efi Pylarinou Advisory
| 16/11/2023 12:00:00

There are two Digital highways whose construction has not even started. These are the Digital highways between Asset managers and wealth managers, and the Digital highways between the Asset management side of Insurance companies and the Traditional side of the Insurance business.

Back in 2016 (my second year in FinTech blogging), I wrote on Daily FinTech about 'Three Market Opportunities in Insurance Asset Management[1]'

Data opportunity
United Health has been selling data (aggregating claims data) to drug companies, which in turn use for market research on how their products are used, how effective they are, and how well they are competing with rival drugs. As a result of this “aside” type of business, United Health created a standalone business offering support, called Optum in 2011, which operates multiple businesses (Optumbank for loans, OptumHealth managing care centres, OptumInsight offering data analytics etc). OptumInsight uses analytics and predictive sciences to make empower its clients to form accurate financial and clinical projections. It is a US$5 billion in annual revenue business, based on reusing the aggregate information contained in the vast number of claim forms United Health processes.

Other major insurers are investing and growing data analytics divisions within their businesses (e..g Aetna, Cigna, and Anthem).

Finding opportunity at the edge is more effective because it generates new revenue from assets — customers, products or enterprise activities — that are already in place.

From the Harvard Business Review article To Get More Value from Your Data, Sell It

Third-party asset management
Large insurance companies are creating new funds that are then offered through traditional distribution channels to investors. Insurance companies obtain regulatory approval to become investment managers and create funds, that earn fees for them, a capital-lite type of activity. Allianz, Generali and Standard Life are a few of such players. And the smaller ones are starting to grow through the acquisition of independent asset management businesses or human talent.

Allianz Global Investors is leading the way with the largest third-party AUM and its recent acquisition of Rogge Global Partners (RGP), a UK-based global fixed-income specialist.

Fast forward 7 years later, to today and I see different opportunities because of the capabilities of GenerativeAI. No need for United Health, Aetna, Cigna, and the likes to just sell data and analytics as usual. They should also launch conversational interfaces trained on their data offer tiered paid services to their clients and empower clients with contextual insights and research capabilities.

Today, the Harvard mantra To Get More Value from Your Data, Sell It, is transformed to To Get More Value from Your Data, launch a variety of paid services via Conversational Multimodal Interfaces

The investment managers of the funds of insurers like Allianz, Generali and Standard Life can be empowered in a compliant way by data insights from the insurance side of the business like never before.

Imagine if the claims department of the insurance side of the business would launch a conversational multimodal interface trained on their granular data and offer paid services to the investment managers. Their investment research will be taken to another level.

To offer investment insights from the insurance side of the business, launch a variety of paid services via conversational multimodal interfaces
The digital highways between asset managers and wealth managers can be re-imagined in an entirely new way because of GenerativeAI. The relationship between asset managers and wealth managers, anyway, has to shift away from being one of fighting for a space on the product shelf of wealth managers.

Imagine an asset manager that offers wealth managers, a conversational multimodal interface trained on their research, investment, and trading processes. Wealth managers will transform from just being a distributor of the asset managers’ product, to being a partner.

I can imagine Cathie Wood, the Active ETF manager with her controversial transparency practices and open research ecosystem, being one of the first embarking on this journey. She is one of the few of my knowledge asset managers that put the ARKInvest valuation model for Tesla on the Github.

To stand out as an asset manager and not just as a product creator, launch paid services via conversational multimodal interfaces to wealth managers. We are moving away from just selling data, analytics, and content/insights. We could start building Conversational multimodal interfaces that only securely and, in a complaint, way circumvent the silos. These interfaces can change relationships and business models.

[1] Three Market Opportunities In Insurance Asset Management — republished on bank automation news

Read the original article here.