Sramana Mitra: If they’re significantly assisted by technology, they need to be trained to use that technology and do their job of helping investors as opposed to making those decisions themselves, which involves a different level of financial understanding.
Richard Hamm: As I pointed out, Digit is doing exactly that. They’re trying to develop it so that anybody within a couple of days of training could navigate a person through the choices they could make.
They would quickly be able to assist people in being comfortable with the decisions they’re making. I don’t disagree with you; I just don’t see a lot of evidence of it.
Sramana Mitra: I see. This category is most likely to emerge further in this direction.
Richard Hamm: The same thing goes for the traditional investment management businesses. If you’re a bank and you’re facing fee compression, one of the most significant trends in a long time, what are you going to do?
You’re going to try and automate the investment process to the best of your abilities. You’re not going to pay investment managers millions of dollars to be investment managers in a banking organization when you’re worrying about how to lower the fees to be competitive enough to attract client assets.
The investment management business is undergoing its first real attack and disruption in all areas. It’s a business facing tremendous regulatory interference.
It’s less prevalent in the United States by the way. The United States has a much healthier attitude about regulation than places like Canada where that cost is something you can’t figure out with technology. We have solved some of it here.
A big part of technology in our world is things like CRM systems and how they relate back to what we’re doing and what conversations we’re having with people. We can automate things about anti-money laundering. I know a bank in Toronto that has 120 people whose job is anti-money laundering.
Sramana Mitra: It’s a very big category for banks.
Richard Hamm: You think about why that is not automated.
Sramana Mitra: I’ve seen lots of projects that are trying to come up with software to address that issue. They’re blockchain-based solutions. You’re absolutely right. All that is going to get automated.
Richard Hamm: The great thing about FinTech is, the person who can integrate all the little pieces will have the most impact on operations initially. It doesn’t matter what part of the business you look at. It can all be applied. I really believe that’s going to happen, but I don’t see much evidence of it. We use technology for a very simple reason; it’s way cheaper than people.
Sramana Mitra: It’s true for a lot of categories where AI is engineering tremendous automation. That’s just going to grow up. The next decade or two of applying AI to eliminate human functions is going to be immense. Thank you for your time.