Financial Advisors

AI, APIs, Chatbots and Nudges: Building a Financial Wellness Platform

The quest for customer engagement that motivates clients towards positive actions and outcomes is a holy grail for the financial services industry. The reality is that it will take a concerted effort between an understanding of human behavioral biases and barriers with a creative application of technology. The good news is that this mega-merger is well under way.

The financial services industry is in the midst of a rapidly developing alliance between behavioral science and next generational digital technology – an alchemical mix of behavioral finance and Nudge Theory with AI, analytics, chatbots and APIs. This effort is leading to enhancing customer engagement through personalized content and smart analytics coupled with a customizable user experience tailored to individual client needs. The key to this new design is to be at once both a consistent and seamless experience across all the different touchpoints with the customer.

We reached out to new Institute members Kevin McNee, Director of North American Sales, and Andrew Lea, Director of Nudges and Insight of ABAKA – a London-based AI driven digital savings and retirement solutions platform that some might term a Financial Wellness platform, but they put up their trademark flag as Artificial Financial Intelligence™ . We wanted to do a deep dive interview to see how they combined technology with Nudge Theory into a customizable platform. This is a great case study in how to apply technology with a human touch to drive engagement and actions towards a more secure financial future.

Hortz: What was your motivation in building your financial wellness platform? What problems and needs are you addressing with your technology?

McNee: The genesis for ABAKA was the result of a negative personal experience encountered by our Founder’s father due to a lack of financial education and no access to affordable help or planning. This led to a recognition of the need to reduce the advice gap and democratize financial advice for all. Our mission then is simple - to get people better engaged around their finances to produce better outcomes.

 ABAKA is an award-winning Enterprise SaaS platform specifically designed to power digital customer engagement and advice on wealth, savings, and retirement. We do so through an AI powered, cloud-based platform to educate, motivate, and empower customers. Using our proprietary conversational AI and “Next Best Actions” or hyper-personalized “nudges”, ABAKA helps to facilitate a cost effective, hyper-personalized, omni-channel client experience.

We provide financial firms with the capability to quickly access customer data, build insights, and actionable intelligence to drive next steps. Our array of digital solutions covers retirement (accumulation, decumulation), banking (personal financial management, savings), and wealth advisory (goal-based investing, data aggregation) with built in process automation, scheduling, and lead generation and conversion tools.

Hortz: Can you break down some of the technology components you decided on and how they were applied to design solutions to some of challenges you just mentioned?

McNee: ABAKA has built an ecosystem of truly differentiated digital front to backend solutions that leverage new technology such as artificial intelligence (AI), open banking APIs, and omni-channel engagement. This enables our clients to access customer data, build insights and intelligence, and engage at scale with their clients.

Our best of breed conversational chatbot, AVA, drastically increases engagement, converts traffic into qualified leads, and helps scale up advice reach and capabilities. AVA is programmed on over 30 million inputs, exhibiting an accuracy level exceeding 94% with domain expertise across retirement, banking, and wealth management. It can be deployed on any traditional or mobile site and integrates with other apps where clients engage such as Facebook Messenger, WhatsApp, Slack or intelligent assistants including Siri and Alexa. The chatbot can answer questions, monitor transactions, place orders, perform screening functions, link and schedule customers to their advisors and deliver accessible, affordable, scalable advice.

According to a 2019 E&Y Global Wealth Management Research Report, the preference for chatbots is greatest when seeking financial advice, followed by learning about products and services. We engage users across all age and income demographics. Key data points include an average of 8 minutes per session, leading to a reduction in servicing time and costs, a 500% increase in digital traffic lead conversion, or a 32% jump in forecasted retirement income for those who take advice through AVA.

Aside from cost, we have also addressed “black box” concerns inherit in compliance departments across the industry. AVA is structured on an open architecture canvas, allowing compliance oversight, and the ability to create and edit as needed. By adhering to internal policies and procedures we help firms to stay on the right side of regulatory oversight.

Lea: Our Next Best Actions (NBA) machine or intelligent nudges, applies machine learning algorithms to continuously evolve our understanding of how the relevant NBA can be personalized to each customer, driving maximum engagement and personalization based on a customer’s ‘Savings Data Footprint™’.

What makes us unique is the depth of this data footprint which goes beyond a financial statement, factfinder, or risk tolerance questionnaire to include behavioral, social, emotional, financial, health, personal and unstructured data. This data is then systematically screened across Richard Thaler’s 7 principals to all NBAs and Intelligent Nudges, delivering the most relevant message and content, via the right channel that is most likely to resonate and activate the customer.

The NBA & nudges have also delivered results, including a 38% increase in net promoter scores, increase in product conversions from 3% to 31% and has helped 44% of participants to increase their savings contributions.

Hortz: How did you build your technology to be readily accessible and usable by firms using the platform?

McNee: Our core all-inclusive digital solution includes a fully white labeled front to back end solution and is composed of Lego-like modules, allowing firms to choose specific features per there desired vision. What makes this work are the APIs and ability to easily integrate with both existing systems and 3rd party providers.

We have tackled adaptation headwinds such as compliance and cost, developing an a la carte platform that requires zero to little integration, benefiting from existing integrations with core banking systems and CRMs.

Traditionally, innovative AI-based technology solutions have required substantial resources in terms of time, talent, and cost making it accessible only to the most well-funded institutions. We recently launched a “Plug in and Play” solution set designed to meet the challenge of democratizing AI so that providers of all sizes can leverage this powerful technology.

Hortz: Can you explain the basis of Nudge Theory and why you choose it as a major driver of your tech design and client engagement strategy for the platform?

Lea: Nudge Theory is based on behavior science and suggests that we can influence behavior and create better outcomes by “nudging” one in the right direction. By applying Nudge Theory to our NBAs, we fulfill our mission statement, driving individuals to set up retirement goals, increase retirement contributions, consolidate accounts, explore decumulation options, or encourage them to meet with their advisor.

Hortz: There are many applications for your platform in financial services. Where are you focusing your initial launch and why there?

McNee: You are correct, there are a lot of applications that may vary slightly, depending on the specific channel.

Institutional retirement and wellness plans and employee benefits firms are a great fit, as are banks and insurers of all sizes. From my seat, and colored by personal experience, I am most excited to see the growth across wealth management/advisory business where AI and its adaptation are in the early innings to be certain.

What we have are the tools and expertise necessary to engage clients in the digital age, providing the experience and personalization clients demand in a scalable, cost-effective manner. With the mandate to help the industry deploy AI into their operations, I am excited to leverage our ‘Plug and Play’ capabilities, driving innovation and change across all our partner firms.

The Institute for Innovation Development is an educational and business development catalyst for growth-oriented financial advisors and financial services firms determined to lead their businesses in an operating environment of accelerating business and cultural change. We position our members with the necessary ongoing innovation resources and best practices to drive and facilitate their next-generation growth, differentiation, and unique community engagement strategies. The institute was launched with the support and foresight of our founding sponsors - Pershing, Voya Financial, Ultimus Fund Solutions, Fidelity, and Charter Financial Publishing (publisher of Financial Advisor and Private Wealth magazines).

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Bill Hortz

Bill Hortz is an independent business consultant and Founder/Dean of the Institute for Innovation Development- a financial services business innovation platform and network. With over 30 years of experience in the financial services industry including expertise in sales/marketing/branding of asset management firms, as well as, creatively restructuring and developing internal/external sales and strategic account departments for 5 major financial firms, including OppenheimerFunds, Neuberger&Berman and Templeton Funds Distributors. His wide ranging experiences have led Bill to a strong belief, passion and advocation for strategic thinking, innovation creation and strategic account management as the nexus of business skills needed to address a business environment challenged by an accelerating rate of change.

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