How Big Data Research and Technology creates a winner robot product - Motilal Oswal
How Big Data Research and Technology creates a winner robot product - Motilal Oswal

How Big Data Research and Technology creates a winner robo product

The concept of technology and research is, by now, quite obvious. What do we understand by big data? More importantly, how does big data combine with research and technology to create an unbeatable robo product to enhance your financial planning experience? To understand big data, let us take a very common example. Let us say, you go to a supermarket and, as is normal, swipe your Visa credit card at the counter after finishing your purchase. Within less than 5 seconds, the Point of Sale (POS) card machine approves the trade and prints out an acknowledgement. But have you ever wondered about the process that goes behind this transaction? It is something like this!

The POS machine uploads the card details to Visa and that data is verified with the Visa central server, which is located in Singapore. Once the data and the authenticity is verified, the server of the Visa franchise talks to your bank server, which checks if there is sufficient credit limit in your credit card or sufficient balance in your bank if it is a debit card. Once the bank is satisfied it confirms back to the Visa server in Singapore, which then communicates back to the POS machine and approves the transaction. The time taken for the entire process with normal connectivity is less than 5 seconds. That is the power of big data! Behind your transactions there is billions of TB of data that is being accessed and checked before your transaction is approved.

Big data is not about data but about the management of the data..
Remember, when we talk of big data we are referring to the power of the sophisticated algorithm that is able to simultaneously work on multiple data points, compare them with likely solutions and then arrives at an optimal solution. Let us drill this example down to your own personal finances. There are a wide set of financial goals and there are multiple ways to achieve these financial goals. However, returns are not everything. Your plan has to factor in your risk appetite, your tax status and your liquidity needs. So now you have a lot more permutations and combinations.

Then look at the investment choice in the market place. There are over 3000 mutual fund schemes, over 5000 listed equity shares and umpteen other bonds, insurance policies and all these have to be woven into your solution. Then there is the dynamic macro environment. Interest rates change, inflation changes, government policies change, incomes change and all these need to be factored in. When you start creating a matrix of all these possibilities, the possibilities are mind-boggling and impossible to structure and monitor with the human mind. That is where the combination of big data and sophisticated algorithms come in.

What is the big edge in using Big Data?
As we saw above, big data helps you to create the maximum number of permutations and combinations towards getting the optimal solution for your financial goals. There are 3 distinct advantages that big data brings into financial planning..

It brings down the margin for error substantially. Since the solution is arrived at after factoring in terabytes of data, you are likely to be closer to the real thing.

Big data outsources most of the routine and structured intelligence tasks to the machine and therefore frees up your human skills for more value-added tasks. That is likely to improve employee productivity in a big way.

Compliance is a big challenge in the financial services industry and especially the investment advisory business. The advantage of the algorithmic approach is that it automatically factors in most of the compliance needs and makes the process fool-proof.


Powering Robo Wealth using the Big Data advantage..
Robo Wealth platform combines the best of the power of research, insights, technology and the ability of algorithms to manipulate the power of big data. From a financial planning perspective it gives the capacity to structure a portfolio scientifically, monitors it based on credible and back-tested simulation and is also actionable. For investors looking to lead a peaceful financial future, there are 4 distinct advantages that Big Data brings in through Robo Wealth..

It helps create the optimal roadmap for you to move from Point A to Point B. With big data there are more variables being factored into your simulation making it more credible.

Since most of the variables are rule-based and data-driven it automatically instils a sense of discipline into your financial plan.

The big advantage of big data is that it is based on past data but the algorithms are structured with the future in mind. After all, when you are planning your distant financial future, it is all about how close you are to the real situation. That is where big data has a role to play.

Big Data is a great tool for managing change and managing risk. We live in a dynamic world that is changing at a much greater pace than ever before. Your future is secure only if you are able to factor more data points into your decision making. That is where big data comes in.

Robo Wealth is just one example of how the power of big data can be leveraged to bring your financial decisions and your financial solutions as close to real life situation as possible. For that, there is a big contribution that big data gives!
 

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