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Running A Robo Advisor In Times Of Trouble

Lennart Asshoff, CEO of Nucoro explains what it’s like to run an investment and savings platform during the coronavirus epidemic, and how businesses can stay resilient at this time. 

A market crash like the one we are experiencing now, is not the first and won’t be the last. It is the unlikely event that you must treat as likely to happen. It is also an extreme scenario, where the market impact is combined with the need to move the majority of processes to function remotely. How you react to it will have a lasting impact on your organisation’s financial wellbeing – and is an opportunity to show how resilient your business can be.  

With historic drops in the stock market as we saw on March 16, 2020, the emotional rollercoaster of investing just went up a gear. Several, in fact. 


In the driver’s seat 

Being at the helm of a digital investment and savings platform at a time like this is not without its challenges as the market fluctuates and many investors err on the side of caution, but at Nucoro we have put ourselves in the right position for long-term growth for our partners and their customers, despite a fluctuating market. 

Investing, for us, is a long-term strategy. So it’s important to build the right methodology into the system in the first place to prepare for a market crash. This is where having robust technology and the right infrastructure in place comes in. 

Firstly, as the environment shifted we were able to focus on our clients and not our systems as we had every step automated already. The checks and analytics we had put in place from day one meant we could be sure the platform was operating normally. 

Next, transparency is key at Nucoro and that’s something customers truly value in times of uncertainty. Our clients are able to see exactly what is happening across all portfolios, as well as their customers having visibility on their individual portfolios and how the system is adapting to the drastically increased market volatility. This has not only reassured investors but has reduced the strain on our clients customer service – people have fewer questions to ask as the information is already right there in front of them. 

Finally, as mentioned above, it’s all about having the right infrastructure in place that can stand the test of time and cope with the unexpected. Our auto scaling infrastructure was able to easily handle the massive increase in platform usage, trades and onboardings that came with circumstances we could not have anticipated, but prepared for.


Wider market implications

The impact of COVID-19 will reach far and wide.  For example if we take a look at banks, I think this will not only reflect, but accelerate the need for financial services to go fully digital. Often we think about the “scary machine replacing humans” analogy, but at a time when we are all advised to steer clear of one another, this actually provides some comfort. 

Retaining the human aspect is of course important for all service industries, but with the huge influxes we’ve experienced in the past few weeks it reflects that having the right technology in place is matching, if not overtaking, this need. Without this technology, how can you manage massive peaks in traffic? How can you deal with the increased need for communication? How can you give people the control and transparency they need? 


The acceleration of “innovation” 

The current market environment shows how easily all the things we saw as “innovative” have suddenly become a basic requirement. 

I see three key outcomes:

  • Customer expectation will continue to rise as it has in recent years – now, customers will demand more transparency and better digital solutions where they are in control. 
  • Organisations face stronger pressure to adopt fully automated solutions to be able to operate normally in ‘black swan’ environments, now we have seen such stark proof of this as a possibility. 
  • A fully integrated platform will be necessary, with a 360 degree view on the customer and the right analytics to be able to react quickly and where necessary. 


Lessons learned 

Though this is a difficult time for many businesses, it’s important to focus on what we can learn from the experience – for me, it’s the importance of empowering customers. 

For instance, say one of our client’s investors situations changes and they need to make a withdrawal or set a new risk level. If they have to spend three hours on the phone being passed from department to department, this is a very stressful time – on top of the financial strain, it has a negative impact on their mental wellbeing and they will associate this feeling with the brand in future. 

This is true of any industry, but particularly within financial services – helping people manage their money is always a significant responsibility, but it even more so during times of crisis and uncertainty. Transparency and visibility breeds trust, and trust is vital at times like these. Now is not the time to be met with a chatbot which can’t answer the questions you have. 

This blog is part of our 'Expert Insights' series, read the next instalment here.

Key Ideas

  • Investing is a long-term strategy
  • Customer expectations towards more transparency and better digital solutions are continuously becoming apparent
  • Platform approach in investing can provide a 360 degree view on the customer