Greg Davies, head of behavioural science at Oxford Risk, said: “The winners in financial services will be the companies that best engage with their customers and help them achieve better outcomes.”
“The combination of behavioral finance, data science and AI technologies creates an exciting combination that can make this happen at scale and in a more personalized way than ever before. Behavioral engagement technology can help us all make better financial decisions.”
In this way, behavioral engagement technologies can help mitigate the costs of being human, especially when it comes to disinvestment.
For example, thanks to behavioral engagement technology, an investor who has built a moderate risk tolerance with a globally diversified, multi-asset class “optimal” portfolio can expect excess returns of around 4-5% per year on their cash.
So while choosing not to invest may help investors sleep easier, it could come at a cost in the long run.
Davis continues: “Poor investments are a result of low engagement. It’s a conundrum. An isolated tactic like just increasing investor engagement has limitations and may backfire at some point.”
“Properly engaged investors are all the same, but under-engaged investors are all struggling in their own way, and figuring out what to do for each investor every time and making sure you recoup lost revenue is just not possible without technology.”
The benefits of behavioral engagement technology
Therefore, leveraging behavioral engagement technology can provide investors with insights to find the “sweet spot” in engagement.
But of course, this sweet spot will be different for every investor, and Oxford Risk’s Behavioural Engagement Technology Platform helps provide hyper-personalised, bespoke tools for the most effective investment engagement on an individual basis.
