Fintech
Oxford Risk: Increasing investor engagement with behavioral technology
Greg Davies, head of behavioural science at Oxford Risk, says: “The winners in financial services are likely to be those who are best able to engage with their customers and help them achieve better outcomes.
“Behavioral finance, data science, and AI technology together form an exciting combination to make this happen on a larger scale and with greater personalization than ever before. Behavioral engagement technology can help all of us make better financial decisions.”
In this way, behavioral engagement technology helps mitigate the cost of being human, particularly when it comes to investment inaction.
For example, an investor who develops a moderate risk tolerance in an “optimal” and globally diversified multi-asset class portfolio, using Behavioral Engagement Technology, can expect to outperform cash by approximately 4-5% per year.
So while choosing not to invest may help investors sleep soundly at night, it can come at a long-term cost.
Davies continues: “Poor investing is driven by low engagement. This leads to a conundrum: isolated tactics to simply get more investor engagement will only get us so far… and at some point they may even backfire.
“Properly engaged investors are all the same, but every poorly engaged investor struggles in his or her own way, trying to figure out what to do, for every investor, every time, to reliably capture a greater share of those lost returns, which would not be possible without technology.”
The benefits of behavioral engagement technology
Leveraging behavioral engagement technology can therefore offer investors insights into identifying the “sweet spot” in their engagements.
But of course, this sweet spot is different for every investor, and Oxford Risk’s Behavioural Engagement Technology platform can help provide hyper-personalised, bespoke tools to ensure the most effective investment engagement at an individual level.