In the past week the term ‘Fourth Industrial Revolution’ has been the buzzword of the recent political party conference season with the likes of Chancellor Philip Hammond, his Labour counterpart John McDonnell and Shadow Business Secretary Rebecca Long-Bailey stressing its importance for the UK in years to come.
Building on the ongoing third digital revolution, the Fourth Industrial Revolution represents new ways in which technology will become embedded within global society by the means of robotics, artificial intelligence (AI), nanotechnology, quantum computing, biotechnology, The Internet of Things and autonomous vehicles among others.
Both AI and The Internet of Things are areas which will become increasingly important to the wealth management sector and with this in mind Ginny Turner, Executive Director at Quilter Cheviot, spoke at the second annual eprivateclient Accountancy Dinner in London this week (3 October 2017) on these sectors and investment opportunities the Fourth Industrial Revolution will create.
Ms Turner explained to an audience of senior private client accountancy practitioners that AI was “basically data analytics and pattern recognition” and that rudimentary examples could already be found in a spell checker and or when Google completes search terms.
AI, Ms Turner said, is already being utilised in industries in different ways such as in medicine where it is able to detect characteristics of potential health problems in MRI scans and X-rays. Another example was in the food delivery and commercial property sectors where it can detect patterns in consumer demand for certain types of food which could lead to mutual benefit.
Alongside AI, The Internet of Things - the interconnection via the internet of computing devices embedded in everyday objects, enabling them to send and receive data - is another area where development is underway.
Ms Turner said that although the technology has been around for a long time it “had slowly crept up on us.” An example Ms Turner gave was that of the humble air conditioner which went from manual application to having a control, then being set remotely via mobile phone to now when an AC unit knows when it has a fault and can then inform the supplier.
The increase in this interconnectivity is evident in robotics which has seen growth in the manufacturing sector as well as being utilised more and more in surgery - especially spinal - and in everyday household items like vacuum cleaners and lawnmowers with the “same core technology and its interconnectivity seen across various sectors.”
Ms Turner said that thanks to science fiction films about AI there was a “misconception that it will create machines with ‘super intelligence’”.
Whilst the likes of Elon Musk and Stephen Hawking have cautioned against AI, Ms Turner said that rather than making humans redundant it would make us more efficient.
On a macro level Ms Turner quoted Accenture who believes AI technologies will increase labour productivity by up to 40 percent by 2035 and although some industries with easily definable, routine tasks were arguably the most susceptible to AI displacement at the same time AI would make “some jobs more efficient and easier.”
For the wealth management sector AI and The Internet of Things are already included in client portfolios as companies adapt to the ‘new norm’ whilst investment opportunities were presented to the sector through investing in areas such as cloud storage, data gathering and computer hardware manufacturing.
With the increasing digitalisation of companies, a cost of doing business in this way is data protection so Ms Turner expects cyber security to continue to be an interesting area for investment.
The world, Ms Turner concluded, was changing and both AI and the Internet of Things will impact global economies.
“I am excited to see where it is going.”
The second annual eprivateclient Accountancy Dinner was held at The Goring Hotel on 3 October 2017. It was attended by a number of senior private client accountants, two speakers and featured a group discussion on tax avoidance and policy. The dinner was chaired by James Anderson, founder of PAM Insight and kindly sponsored by Quilter Cheviot.
|RATE THIS ARTICLE|
THIS WEEK'S TOP STORIES
PAM (Private Asset Managers) and its sister website PAMonline combine to provide "...the best guide available to the leading firms in private client fund management" (FINANCIAL TIMES). PAM compares managers on a level playing field by key data such as fees and charges, minimum investment thresholds and so on.