From data to knowledge to wisdom

We talk a lot about data analytics and the fact that you cannot be smart with dumb data is the start point. You have to be smart.

Beyond smart, you have to be clever. You need to take data and use prediction modelling to think about what’s next? You need to predict the next move. That’s clever.

Then, go one stage further and become wise. Wise is beyond clever and smart. Wise is when you know what you need to know before you know it.

Today, most systems are smart and some are becoming clever, but few are wise. Wise can not only predict what’s next but can tell you if it is the smart thing to do.

Think about it.

How many systems do you use that advise you? In my case, none. They’re too scared of the regulators to tell me what to do. This is a huge opening gap in the marketplace. The market for advice. Tell me what to do.

The issue here is obvious: if you advise me badly, you are liable. Nevertheless, there will be a growing band of roboadvisors, using AI, who will advise you on your funds and funding. In fact, going to the next level, you will have advisors who do everything for you automatically with no advice. They will just do it.

We are in the age of the delegated, designated, democratized, intelligent service provider.

We no longer have to think. AI does it for us.

Bots deal with bots; bots sell to bots; bot-to-bot is the world we are moving into and few of use understand what that means. If bots do all, what do we do? Answer: we programme the bots.

The focal point of the next decade or more will be on how to be the most effective at influencing the bots. If customers are delegating their financial lives to bots, how can we be most relevant to their bots? It is easier if their bot is already a customer, but how would you get the bot to switch? Rates? That’s probably it. It won’t be advertising or emotion. Bots have no emotions. It might be connectivity and ease of access, as bots will like that. But it will be most likely be based on the deal. Who has the best rates.

This is slightly worrying as a rate war, as we all know, is  a war that leads nowhere. There must be more … and there is. It’s not just rates, but conditions. How long is this investment tied into that product? How easy is it to switch? Is it fully protected? Is there a timeframe before closing the account?

Of course, the bots will know the answers, but the key here is whether the bank bots have all the info to advise the customers bots as we move into a bot-to-bot trading world? Are you confident your bot is doing a good job?