The financial world's love of technology is long established and widely recognized. From fintech (aka "financial technology," a blanket term for tools made specifically for financial purposes) to general-purpose communications solutions, the industry has been a champion of innovation for some time now.
Nowhere is this idea more important than in portfolio management, where the right selection of technologies can greatly ease research, communication, decision-making, and numerous other mission-critical tasks. The following innovations have had notable impact over the last several years, making them worth a look for any organization wishing to iterate upon its portfolio-building or portfolio-managing processes.
Unified Communications: Be Reachable Anywhere
Most portfolio managers would likely point to products that allow them to perform financial transactions and conduct research online as the most important tools for saving time and effort. Expanded communication capabilities granted by cloud technology, however, should also be considered. With the right regulation-sensitive unified communications-as-a-service tools, client-, internal-, and research-focused communications become easier: Valued clients can call the same number to reach their manager through voice or video whether they're at the desk or away, while personnel can take advantage of powerful features such as the ability to have all their phones ring simultaneously.
The concept of unified communications as a supporting financial technology is so pervasive and useful it plays a role in most of the items contained herein. Unified communications provide the backbone for capabilities that are important to organizations, such as mobility, expanded access, and work-from-anywhere.
Client and Colleague Collaboration
Even though collaboration has strong ties to unified communications, it's important enough as a supporting financial technology to consider on its own. Take, for instance, a manager who wishes to pitch options to a client who's out of the country. Hopping on a plane may be impractical, while both voice calling and email lose the necessary persuasive element. Instead, the manager can videoconference using a business communication system with shared workspace, effectively giving the client an in-person presentation through the cloud; charts, tables, and other visual data are all included, as is body language, thus maximizing impacts lost in other formats.
Of course, the same idea applies for intraoffice collaboration. With the tendency for shadow IT to arise where no official solution exists, intraoffice collaboration is another important consideration — especially in finance, where small privacy missteps can lead to large sanctions.
Automation and "Robo-Advisors"
Financial portfolio managers have long used automated alerts and advice. Knowing which inputs create the best outputs is an art unto itself, giving those with a firm grasp of the systems they use an immediate advantage. To that end, while so-called "robo-advisors" have caused dilution and disruption in finance, portfolio managers who can leverage them skillfully stand to benefit.
A professional utilizing a robo-advisor as an automated tool can gain an elevated perspective on the investments and strategies they favor, checking robo-advice against their honed human intuition. Compared to standard robo users, who are left to take advice from platforms at face value, that type of use is a stronger approach. Also, an advisory and management service utilizing brandable "powered-by" automatic advisors have extra value to present to current clients and — more importantly — a way to profitably open the door to lower-fee, lower-revenue service tiers; the robo-advisor does the work, while the humans gain the revenue.
If technologies sell a trend, it's that they don't reinvent the wheel so much as they add capability to things advisors, managers, and others have been doing since finance was an industry.
The Internet of Things: Beyond Buzzwords
To the buzzword-sensitive, the IoT may cause a bit of grumbling. It may seem that managing financial portfolios has little to do with legions of connected sensors and their ability to record, curate, and report data to various systems. In practice, however, that assumption couldn't be further from the truth; its most important use as a supporting financial technology boils down to its ability to help organizations stay informed.
IoT's value is often passive. Advisors must consider data from a diverse number of sources, some of which may appear to have little bearing on financial matters. Thus, a sensor that tracks and reports data pertinent to investment health — the potential for hurricanes on the island where a company runs its factory, for instance, or the supply of a relatively rare raw material to a supply chain that depends on it — can give the advisor a stronger platform upon which to offer advice and make decisions. Opportunities like these will continue to make IoT tech a critical part of technology in finance, even if the term itself does seem a bit overused.
A New Dawn for Supporting Financial Technology
If the technologies listed here sell a trend, it's that they don't reinvent the wheel so much as they add capability to things advisors, managers, and others have been doing since finance was an industry. A time-crunched field like finance is opportunistic by default, and its actors are generally willing to embrace tools that will save them the slightest bit of time.
The success of tools like the above creates a gambit for all managers, advisors, and others: Offer the same or better "secondary" functions as the competition or risk irrelevance. It's the natural flow of business everywhere — and one that most successful financial organizations are able to capitalize upon.