The recent technological advancement within artificial intelligence, the "Internet of Things", and robotics has generated significant impact on traditional businesses, causing decreasing profit margins across several sectors, whereas most of the big winners in the Wall Street IPOs are companies with innovative ideas from Facebook (NASDAQ: FB) and Twitter, (NASDAQ: TWTR) to Snapchat (NYSE: SNAP). There are two common determining factors among those successful IPOs: Ideation and User Generated Content (UGC). In the era of big data and artificial intelligence, we will soon be able to create the tools to better capture the value from ideation and UGC, as well as spur economic growth by capitalizing on human ingenuity. With the ever-accelerating developments in technology, the world is in the process of moving from a consumer economy to a knowledge-based economy, and from a debt- based system to an equity based system, which will include movement from tangible assets to intangible assets. Hence we envision that our world economic system will operate on a new growth formula.
By redirecting focus, wealth managers can successfully respond to challenges brought on by digital disruption, demographic shifts, and tighter regulation. Wealth managers have seen their fair share of ups and downs in recent years, and while challenges remain, advisers can drive business and growth by paying attention to demographic segmentation, how investors are using technology, and changes in regulation. In this episode of the McKinsey Podcast, Simon London first speaks with PriceMetrix chief customer officer Patrick Kennedy and McKinsey partner Jill Zucker about the North American wealth-management industry; he follows that with a discussion with senior partner Joe Ngai, on the industry in China. Simon London: Welcome to the McKinsey Podcast with me, Simon London. Today, we're going to be talking about financial advice and the people who provide it: financial advisers, or as they're sometimes known, wealth managers. Wealth management is a very big business--and also a business facing a number of challenges, such as new technology, changing demographics, and tighter regulation in a lot of countries. A little later, we're going to be getting a perspective on China. But we're going to start here in North America. For the first part of the conversation, I'm joined on the line by Jill Zucker, a McKinsey partner based in New York, and Patrick Kennedy, who's based in Toronto. Pat is chief customer officer for PriceMetrix, which provides data and analytics to the wealth-management industry.
Rarely does a day go by without more news predicting the end of work. After all, autonomous vehicles are all but certain to replace truckers and taxi drivers in the coming decades, and robots have already taken over many jobs in factories and warehouses, and will continue to expand their reach beyond heavy industry as they become smarter and ever more affordable. Perhaps most frighteningly, even professional services no longer seem safe from the encroachment of increasingly sophisticated artificial intelligence (AI). Law firms, for example, employ electronic-discovery software, which uses natural language processing to sift through reams of documents faster and more cheaply than the entry-level lawyers who used to do this tedious work. Deep-learning image recognition tools can flag and classify worrisome tumors in digital scans as well as, or better than, experienced radiologists.
Mark Cuban, chairman of AXS TV and owner of the Dallas Mavericks, listens to testimony during a Senate Judiciary Subcommittee hearing Dec. 7, 2016 in Washington, DC. (Photo: Mark Wilson, Getty Images) Add Mark Cuban to the list of tech visionaries exhorting the need to address the advance of robotics and artificial intelligence. "Automation is going to cause unemployment and we need to prepare for it," Cuban posted on Twitter with a link to an essay about the rise of robots in the workplace. Automation is going to cause unemployment and we need to prepare for it. Employment and jobs have been a hot topic recently with President Trump's emphasis on getting U.S. corporations to focus on jobs at home and his plans of tightening of trade and immigration policies to foster job growth. Automakers including Fiat Chrysler, GM and Ford, as well as Intel and Walmart have recently announced plans that the companies say will create new jobs.
Without a doubt, artificial intelligence (AI) is changing how we do things. From today's iterations that power apps in your smartphone, to promises of super-intelligent AI in the next few decades, more companies are pushing for integrating AI technology into what they do. All of this means that there could soon be a new AI business sector thanks to an explosion of innovation, according to Bruce Aust, vice chairman of the U.S. stock exchange Nasdaq.