Advantages of Behavioral Engagement Technology
The true breakthrough, however, is found in the company’s Behavioral Engagement Technology. This state-of-the-art method integrates psychological insights with targeted communication strategies, enabling financial institutions to connect more effectively with their clients.
Greg explains: “We have a wealth of narratives, strategies, and insights drawn from academic behavioral research and over 20 years of direct experience with individuals. On the flip side, we also utilize data-driven metrics that provide insight into who people are.”
This technology functions by crafting a “map” of a person’s financial identity, allowing it to pinpoint the best methods for effective communication. This might include personalized narratives, behavioral nudges, or specific communication techniques tailored to the individual’s distinct characteristics.
“The challenge lies in taking that personal map and leveraging technology to identify the stories and narratives that will resonate,” Greg states.
He further notes that machine learning algorithms are instrumental in refining these engagement strategies, enabling the system to evolve based on actual user interactions over time.
The potential uses for this technology are extensive. From assisting investors in overcoming psychological obstacles to responsible investing, to identifying behavioral vulnerabilities in clients to satisfy regulatory obligations, the system is adaptable to a broad spectrum of scenarios.
One particularly exciting application is in sustainable investing. Greg points out: “We can utilize it within the sustainability and ESG sectors to pinpoint individuals whose non-financial values they wish to reflect in their investments.”
The technology also holds promise for client acquisition. “We can apply this in our prospecting efforts,” Greg elaborates. “Once we understand a potential client’s financial personality, we can customize our approach to persuade them to choose our firm over competitors.”
Challenges with Data Accessibility
Despite the evident potential, Greg acknowledges a significant hurdle: access to client data. While Oxford Risk has established itself with strong intellectual property, algorithms, and profiling tools, they require more real-world client data to enhance and validate their system’s effectiveness.
“We currently have proof-of-concept projects running with a select group of innovative clients worldwide. The fusion of our Financial Personality profiles with real-time data regarding client interactions creates tremendous opportunities for highly personalized engagement that nudges clients toward better choices,” Greg adds.
The potential of Behavioral Engagement Technology is truly appealing. By allowing financial institutions to engage with their customers as unique individuals rather than broad demographic segments, it creates opportunities for mutually beneficial outcomes.
Clients can overcome hurdles to prudent investing, while banks can enhance asset management, boost client retention, and cultivate loyalty.
As the financial sector continues to tackle challenges around personalization and client engagement, Behavioral Engagement Technology is well-positioned to make a significant impact.
Greg concludes: “The industry is already taking its initial steps in this direction. We have been developing the intellectual property, technology, and profiling tools, but for our machine learning to advance, we require even more data. We are eager to collaborate with our clients to empower their investors to make even more informed financial choices moving forward.”
