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StanChart explores robo-advice

Standard Chartered Bank is exploring ways to integrate artificial intelligence into its businesses, one of which is robo-advisory, according to Peter Clark, regional chief information officer for Greater China and North Asia.
Peter Clark, Standard Chartered

“We are running proof of concept in Standard Chartered with AI. [One of the things] we are looking at is around investment advisory or robo-advisors,” he said on a panel discussion at The AI Summit held in Hong Kong this week.

Like other robo-advisors available in the market, the platform will be looking at performance data of various securities to come up with an optimal portfolio that matches the client’s needs and risk appetite, Clark explained.

“Typically, I think AI-based systems could probably do it better than a lot of [individual investors],” he said.

“I certainly expect investment management businesses will be heavy users of AI,” he added.

He did not elaborate further about how the bank is experimenting with the technology or give a timeline for the robo-advisory platform.

Standard Chartered has been finding ways to improve its digital services. In February, the firm partnered with fintech firm Moneythor, which provides recommendations and insights to users, such as personal and business financial management, according to a Moneythor statement.

On the wealth advisory front, the firm launched in April 2017 “Advice”, which is a digital advisory tool that makes use of Thomson Reuters’ financial markets information and analytics platform, according to a statement from the bank. Advice is used by the bank’s private banking relationship managers to advise clients more quickly.

Other banks have also launched digital advisory platforms for relationship managers and clients.

UBS Wealth Management’s UBS Advice, which is an advisory platform that builds portfolios based on a client’s needs and risk profile, was launched in Asia in 2015. Last year, UBS Group decided to bring the platform to other banks in a white-labelled version.

Credit Suisse launched its digital private banking platform in Singapore in 2015 and in Hong Kong in 2016, according to a statement from the bank. The platform provides clients with access to information about their accounts, market insights, tools to analyse their risk exposure and trading capability.

Chatbot problems

One AI area the financial industry is exploring is the use of chatbots, where a computer converses with human users.

Schroders was one of the first to launch a chatbot within the asset management industry. Launched in Singapore in June, “Schroders Go”, which operates through Facebook Messenger, offers real-time communication to the firm’s distributors, which allows them to access information on all mutual funds for sale in Singapore. It also provides financial market news and market views.

Standard Chartered is expected to launch a chatbot for Hong Kong customers this year, according to Clark, noting that it is in test mode.

Clark believes that chatbots should be used together with human interaction. “I see AI as supplementing human interaction and not replacing it.”

Michael Leung, chief information and operation officer at Citic International Bank, shares the same view. “I don’t think that AI or chatbots will ever be able to handle 100% of cases,” he said during the panel discussion.

Leung explained that difficult questions or requests coming from customers will still require human interaction. He also added that chatbots lack “sentiment”, which is often times required in human interactions.

“Another challenge is what we call ‘situational awareness’. If there is already a very angry customer at the other side of the line and you put a chatbot there, you will only make him more angry,” he said.

Other AI uses

Standard Chartered is exploring other ways to apply AI intelligence in its operations, including credit underwriting and alert monitoring, particularly for money laundering and tax evasion, according to Clark.

“I certainly see artificial intelligence taking a quite big role in financial crime monitoring,” he said.

Citic’s Leung said that the firm is exploring AI for customer onboarding.

“For a new customer [in Hong Kong], opening an account for the first time is an issue,” Leung said, adding that Hong Kong is lagging behind Singapore in terms of the ease of opening an account.

“We are trying to [explore] AI to make that process more efficient, [such as using a mobile phone without face-to-face contact with a banking representative]” he said.

However, he noted that the process may be difficult, as the process requires a lot of AI. “How does it check if the Hong Kong ID is genuine? How does it scan your face to make sure it’s a live version instead of a photo?”

Part of the Mark Allen Group.