Redefining Wealth Management with Advanced NLG

Transcription

1 Redefining Wealth Management with Advanced NLG Abstract In today's digital age, banks realize the importance of data, and are leveraging it to offer exclusive client services. As banks adapt to a customer-centric digital wealth management business model, customer analytics and insights are becoming vital to drive growth, and analyticsdriven advisory is gaining ground. In this scenario, it becomes important that client communications are made effective and also operationally convenient. However, most banks today use manual processes or standard narrative themes for client communication, based on the customer segment catered to, or the products and services offered. Many a times, the full value of insights embedded within data is not communicated due to predefined narrative themes or the inherent limitations of manual processes. With a significant increase in the volume of data being processed, banks face unique client communication challenges as they struggle to bundle all the important insights hidden within the data both structured and unstructured, like transaction

2 data, customer s, social media posts, and so on. This paper discusses some technology solutions that wealth management firms can employ, to generate customized narratives based on available data, thereby improving client communication. Introduction Wealth management firms today are striving to differentiate themselves by delivering unique customer experiences. Firms are therefore harnessing the power of Big Data analytics to communicate effectively with customers. Big Data tools allow banks to process large volumes of structured and unstructured data and generate actionable insights based on predefined financial models and intelligent mathematical algorithms. It is common knowledge now that data analytics is immensely useful in generating investment recommendations, obtaining market insights and cross-selling leads, and ensuring timely regulatory reporting. NLG at Play In the last couple of years, data generated on banks' digital wealth platforms has grown enormously, and at a rapid pace. The volume of data is only going to increase, and this poses distinctive challenges for banks as they attempt to create meaningful narratives for all the insights generated by data analytics platforms. In this scenario, using manual processes for data analysis will not be a wise choice. This makes the case for automated narrative generation software, which will help wealth management companies efficiently convert findings from data into comprehensive text narratives. The insights gained from these narratives will help build intelligent solutions. Natural Language Generation (NLG), the technology underlying this process offers a great opportunity to decipher the stories hidden in data. Banks can successfully deploy NLG tools to generate product and service descriptions, investment recommendations, financial reports, and portfolio analysis summaries. Additionally, these tools can help develop narratives for data

3 presented on internal dashboards, and facilitate personalized client communication with story-like narratives supporting data visuals. How Advanced NLG Technology Helps Advanced NLG technology offers more capabilities than a simple language generation tool, and can handle a number of insights generated through data analytics tools. It can help deliver key advantages to wealth management firms. NLG tools can revolutionize data analytics. A solution built using this technology can generate insights in natural language to accompany the standard data visualization formats like graphs and charts. NLG helps transform data into meaningful narrative text based on an in-depth analysis of the underlying data. The automated, data-driven narratives help identify underlying trends, correlations and discrepancies. Based on the insights gained from these narratives, banks can develop products and services that deliver intuitive and unique customer experiences. NLG technology based systems are a lot more robust and scalable to handle huge volumes of data, and thus, more equipped to handle future demands. Current State of Affairs Most wealth management firms today have deployed advanced data analytics platforms to aggregate data from multiple sources, clean it, and thereby analyze and visualize it to present the culled out information as graphs or charts. However, it has now become very important for banks to draw meaningful conclusions from this data analyses, and roll out relevant offerings to customers. The data visualization feature of existing analytics platforms doesn't solve the problem completely, as it fails to tell the data story with an understandable narrative text. The resultant graphs and charts require further interpretation. This forces banks to deploy additional skilled resources (like data scientists) to interpret the data and manually derive insights that are understandable and actionable, which is both costly and time-consuming. In the event of unavailability of these skilled resources, banks stand to lose potential business opportunities, which can dent their competitive position. Therefore, a technology solution that can quickly deliver quality insights relevant to customers, on a large scale, will help

4 operationalize the data insights, in turn immensely benefitting the wealth management business. Advanced NLG technology can help automate the manual process of translating data into a narrative that is readily actionable. The Way Forward Wealth management firms must embark on a technology initiative to incorporate advanced NLG capabilities into their data analytics platforms, for effective client communication and enhanced internal operational efficiencies. Companies need to individually assess and identify specific business areas where NLG capabilities can be employed. The key functional areas where wealth management firms can deploy NLG capabilities are: Relationship management: Effective client relationship management is the basis of any financial services institution, particularly, a wealth management advisory firm. NLG systems can provide advisors with pre-generated discussion points for upcoming client meetings, which reduces the preparation time and effort. This pre-generated meeting agenda can contain information such as client investment objectives, risk profile, portfolio performance, investment recommendations, market insights, and house views. Based on this information, advisors can create customized plans and reports for clients. Customer service: Wealth management firms will be able to deliver more customized investment recommendations and market insights based on investment objectives, risk profiles, and trading strategies. Narratives with a dash of human discretion and subjectivity will help customers better understand the data presented through graphs and charts, besides strengthening relationships. Transparent investment cycles will improve customer engagement. All these will translate into better customer experience, which will in turn drive revenues and ensure customer retention. Operations: By automating the process of aggregating data from multiple sources and deriving insights from it, NLG systems can help firms improve internal operational efficiencies, and allow wealth advisors to focus on core business activities. Compliance and reporting: The advanced capabilities offered by NLG systems will allow compliance teams to quickly identify the discrepancies embedded within the data, and raise alarms on time. Firms can thus avoid financial penalties imposed by regulators for non-compliance.

5 The finance function generates MIS reports by aggregating data from multiple sources. NLG solutions optimize this process by providing access to meaningful information, and considerably improve the quality of MIS reporting. Real-time risk analysis: Real-time analytics with appropriate narratives will be more meaningful and actionable for businesses. Banks will be able to drive operational efficiency by delivering comprehensive insights to internal stakeholders. NLG systems will reduce the dependence on manual data analysis, significantly. To begin with, wealth management firms can use NLG capabilities for servicing the most competitive mass affluent segment, while continuing with manual processes for the High Net-worth Individuals (HNI) and Ultra High Net-worth Individuals (UHNI) segments. Depending on the success of NLG based solutions, firms can use these for the HNI and UHNI segments thereafter. Conclusion Though wealth management firms have adopted best-in-class data analytics applications, manual processes have hindered their ability to fully leverage the financial insights embedded within data. Advanced NLG technology offers a great opportunity to overcome this shortcoming. By integrating NLG capabilities with other visual formats, wealth management firms can convert insights into human-sounding narratives to deliver an advisor-like experience to customers. Relieved from manual data analysis, relationship managers will be able to focus on business development activities vital for growth and survival.

6 About The Authors Kuldeep Shrimali (Senior Domain Consultant) Kuldeep Shrimali is a Senior Domain Consultant with the Banking and Financial Services (BFS) business unit of Tata Consultancy Services (TCS). He has over 16 years of consulting experience in the capital markets space. Shrimali has worked with leading global financial firms across geographies, and successfully executed several strategic technology transformation programs related to wealth management and capital markets. He has a Bachelor's degree in Electronics Engineering from the Swami Ramanand Teerth Marathwada University, Nanded, India. Shrimali also has advanced investment banking and risk management certifications from the Globecon Group LLC, USA. Contact Visit the TCS Banking and Financial Services unit page on bfs.marketing@tcs.com Blog: Drive Governance Subscribe to TCS White Papers TCS.com RSS: Feedburner: About Tata Consultancy Services Ltd (TCS) Tata Consultancy Services is an IT services, consulting and business solutions organization that delivers real results to global business, ensuring a level of certainty no other firm can match. TCS offers a consulting-led, integrated portfolio of IT and IT-enabled, infrastructure, engineering and assurance services. This is TM delivered through its unique Global Network Delivery Model, recognized as the benchmark of excellence in software development. A part of the Tata Group, India s largest industrial conglomerate, TCS has a global footprint and is listed on the National Stock Exchange and Bombay Stock Exchange in India. For more information, visit us at All content / information present here is the exclusive property of Tata Consultancy Services Limited (TCS). The content / information contained here is correct at the time of publishing. No material from here may be copied, modified, reproduced, republished, uploaded, transmitted, posted or distributed in any form without prior written permission from TCS. Unauthorized use of the content / information appearing here may violate copyright, trademark and other applicable laws, and could result in criminal or civil penalties. Copyright 2017 Tata Consultancy Services Limited TCS Design Services I M I 05 I 17