Staying ahead of the future: how Schroders uses ‘augmented intelligence’ to drive innovation

Chua Chwee Kan, co-head of Global Cognitive Science and Automation (CSA) at Schroders, is tasked with helping the asset manager embrace the future. From machine learning to robotic process automation, Chua and his Singapore-based team use the latest technology to help solve problems across the group and drive business innovation.

“We are hoping to lead the various business units into the next generation with innovative and intelligent technology,” he says. In practice, this means identifying the challenges or pain points various parts of the business face, and finding a technological solution to overcome them.

Chua gives the example of a robotic process automation (RPA) programme his team introduced for a business unit that aggregated research reports from different sources to provide insights. “It was very laborious. It used to take an entire quarter to do it, but with RPA we have been able to aggregate information and deliver it within a month,” he says.

Schroders has now implemented RPA across its business units globally. “We started the pilot in Singapore in August 2017, and then extended the programme to other locations, including London from the beginning of 2018.” he says.

In another case, Chua’s team used natural language processing (NLP) and machine learning to transform unstructured data, namely emails Schroders received, into structured data. Chua explains that using NLP a computer was able to identify relevant insights from these emails and convert them into structured data which the business could use in decision making.

“All of these technologies have opened up other opportunities too because it is not just about increasing efficiency but also redirecting capacity to upscale and focus on more value-added tasks, such as analysing data, enabling them to deliver alpha-generating solutions for clients,” he says.

Humans plus machines

Chua says he would like to recoin the term AI to mean augmented intelligence. He explains that he does not expect computers to ever fully replace humans in the asset management industry, instead he thinks the technology will enhance their work.

“I believe AI and machine learning will have a significant impact on the industry in various use cases, from the back office to the front office operations, but computers will not ever completely replace humans as asset managers.

“We at Schroders see technology as an enabler for business innovation. It helps us to move up the value chain, while intelligently handling manual, laborious and time-consuming processes for us and extracting better insights from our data.”

Chua has worked in the consulting and implementation side the of technology industry for more than 15 years. He spent the past three years advising on big data analytics and AI machine learning.

“These roles have helped me to understand the implementation of technology and they have given me a good overview of the technology vendor landscape. This experience is really important for my work at Schroders, as we are looking at a lot of disruption in the market, and we need to be ahead of the curve,” he says.

Retirement investing

Chua thinks technology will increasingly be able to help solve some of the complex problems the asset management industry faces, such as helping people to save for retirement. He gives the example of the use of AI in the e-commerce space, citing the personalised recommendations made by companies such as Amazon and Netflix.

“Similar concepts of personalisation could be applied to retirement strategies, based on personal lifestyles and evolving circumstances,” he says. He explains that when people make purchases on Amazon, the company uses their data to make assumptions about them and to recommend other products.

He says that if he usually buys electronic gadgets on Amazon, then one day suddenly starts looking at diapers, the company is likely to assume that his wife may be pregnant. “The way we apply AI in the e-commerce space could also be applied to retirement plans.

“As we go through our lives, there are changes to our circumstances and we have different life stages, such as getting married or divorced or saving for a wedding. AI could be used to readjust our retirement strategy in response to these changes.”

It may be some time before we see such solutions in the market. “The data needed to create a model is subject to a lot of regulation in our industry. In addition, it is easier to do a product recommendation or a movie recommendation, but new algorithms would need to be developed and tested for retirement saving, and that will take some time.”

Meanwhile, he thinks it is important for everyone to be aware of the developments in technology. “Every single industry is being disrupted. I think it is important for everyone, not just asset managers, to be aware of the latest technology. It is increasingly changing how we work and play in our everyday lives.

“At Schroders we try to take it one step further. We keep ahead of industry development and actively reinvent ourselves for the future.”