The existence of every business entity is, from the very outset, to solve a problem standing out, so clients are willing to pay to get that needs met.
Living in a big company, assuming a particular job role, employees tend to forget what ‘s the origin and the core competence of the firm.
I always like to ask this question: what is the core competence of Google, of Facebook, of Bloomberg, of FactSet, of my team – index solution, and of myself.
Google has developed and owned the IP of the search engine, which by far is the only and most effective engine, pushing Yahoo basically out of business now. Even though never claim themselves to be the monopoly in searching space, they are, according to Peter Thiel, purposely misguiding the mass to believe they are facing a lot of competition in the marketplace.
As to FactSet and Bloomberg, the business models are quite similar, providing a handy user view or analytical windows to conduct financial analysis. With the prevalence of these tools, obviously, add-on value is diminishing. With the big data, machine learning, artificial intelligence now in reality, being limited to only be able to hit buttons on the terminal is falling behind. Traditional fintech firms like BB and FS have to adapt and transform. Microsoft’s current CEO is catching up, making strategic moves of purchasing LinkedIn two years ago and Github today (June 04, 2018) for $7.5 B. Seeing the pioneer of windows creator – Microsoft – drifting away from their own foundational product, there is no reason for FS and BB to not consider carving out or diving into new space.
Index Solution group was created and grown now thanks to our distinctive approach, differentiated from the traditional indexers. This business is no longer about calculating an existing market make-up and weigh them according to each security’s market capitalization. The core essence of this business is to find “related” and “similar” companies in a fast and accurate fashion. There is no way to employ manual, fundamental research work, as has been carried out in last decades, to keep the edge. Our possession of a rich swathe of data and capacity to apply state-of-the-art machine-learning algorithms to parse data into executable financial investment vehicles are standing out and growing up.
Drilling down to an individual level at work, I constantly ask myself what to do that will bring the most value in the future. It’s much clearer after hovering from top to obtain the macro-level perspective. No doubt, there is no need to grasp the windows or box buttons, what is vastly needed is the mastering of analyzing naked data, structured or unstructured content efficiently and quickly. Clients are same and demands are same, they want the best investment so their money can grow to the maximum degree with the lowest cost. Hence, passive funds like ETF will keep replacing active funds. As the foundational benchmark, indexes will be more and more needed. Just they will have to be smarter, more robust, quicker, nimbler to keep up with the forever fierce competition. So, individuals, doers need to keep learning and honing in programmatic data processing skillsets and sharpening the ability to create and experiment ideas and strategies.
So we must pay particular attention to the artificial intelligence, which makes those linear, impossible tasks in past to be possible now or in near future. It’s a bit sad, but the truth of what’s undergoing is that traditional financial managers or advisors are pushed out of business, replaced by robot intelligence who are better and cheaper. The composition of our clients changed from windows users to robot buyers, we need to embrace ourselves to be able to give orders to robots and still be masters…