I recently read a thought provoking article by Klaus Schwab, called ‘The Fourth Industrial Revolution: what it means, how to respond’. At
the beginning of the article Schwab describes the first three industrial revolutions, which I think we’re all fairly familiar with:
1784 – steam, water and mechanical production equipment
1870 – division of labour, electricity and mass production
1969 – electronics, IT and automated production
The majority of the article is centred around a fourth digital/technological revolution, which the author says is currently evolving at an exponential rate, rather than the linear pace of the first three revolutions. Schwab says “The possibilities of billions
of people connected by mobile devices, with unprecedented processing power, storage capacity, and access to knowledge, are unlimited. And these possibilities will be multiplied by emerging technology breakthroughs in fields such as artificial intelligence,
robotics, the Internet of Things, autonomous vehicles, 3-D printing, nanotechnology, biotechnology, materials science, energy storage, and quantum computing.”
We’re clearly in the middle of a very exciting and hugely significant period of change and the article got me thinking about the digital/technological changes that I’ve experienced in my life.
My love of technology started whilst growing up in the 1980s, with things like the VHS video recorder that my Dad rented from Granada, my Casio calculator watch, the Atari games console that ignited my Mum’s Pac-Man addiction, my first Sony Walkman and of
course, the obligatory ZX Spectrum 48K computer!
Over the next twenty years or so, technology advances really started to pick up pace, thanks to personal home computing and the growth of the internet. From my perspective some of the best technological innovations included CDs, Nintendo games consoles,
laptops and of course mobile phones.
12 years ago my career took me to Cofunds, an investment platform now owned by Legal & General. At Cofunds I can now see that I was actually working for a pretty exciting fintech company, although I don’t think the term ‘fintech’ had been invented then.
At the time there were only a handful of other companies trying to harness technology to revolutionise the way advisers and investors could manage their fund portfolios.
When I think about how the digital/technological revolution has moved on since 2004, I’m actually left feeling a bit frustrated with the lack of progress from the investment platforms that were changing the face of the fund industry over a decade ago.
Since 2004, other industries have chosen to embrace the fourth industrial revolution unlike those early pioneers in the investment platform space. Apple has launched the iPhone (2007), the iPad (2012) and Apple Watch (2015). In the last 10 years the way
we live our lives has changed beyond belief – for example the way we communicate with friends and family (Facebook & Twitter), search for information (Google & Wikipedia), shop (Amazon & ebay), watch TV (Netflix), order a taxi (Uber) and rent holiday homes
When I look at investment platforms today, I really don’t think anything has significantly changed since I first started working in the industry. The newer entrants, even those that love taking a swipe at the so called ‘legacy’ providers, offer essentially
the same functionality that existed over 10 years ago.
The investment world, and in particular investment platforms, must find a way to keep pace with the fourth industrial revolution, because their customers are embracing digital change in almost every other part of their lives. Investment providers need to
think differently and this means they should be trying to find ways to enhance the customer experience digitally.