Human oversight needed over data analytics

Noting the introduction of comprehensive credit reporting in Australia and its impacts on a borrower’s serviceability, Mr Ohlsson said that while big data and AI is being touted as a major disrupter to traditional business models, the human element of understanding the practical applications of AI would be key to business success.

Mr Ohlsson gave an example of how Netflix and Amazon had both used their big data to create House of Cards (Netflix) and Alpha Male (Amazon), but the outcomes were vastly different.

“House of Cards was the first content that was backwards engineered through analytics at Netflix. By harnessing the data they had from user behaviour on the platform, they could work out what would be the highest-performing mix of directors, actors, colour schemes, etc,” the managing partner said.

“Amazon tried to do the same thing at the same time. Strangely, both Netflix and Amazon came up with legal dramas with very similar plot lines. Amazon’s version was called Alpha Male.”

He continued: “Amazon used a straight line of using the data to determine what the show should be. Netflix took a very different approach and looked at the maths and data with human creativity and brought together the leading actors and directors and exposed them to that information and off they went.

“So, while it’s really cool that there is all th[ese] algorithms and maths, we should never take the people out or disassociate yourself from anything that is running in your own company — make sure you can see it and own it and understand what it is doing and put your gut feel over the top of [what] that information is telling you.”

He added: “You guys are going through one of the most amazing changes that society has been through and you get the great joy of being the custodians as you go across the bridge, get thinking about your businesses, what it is you can use, but never ever take the human out of the algorithm. Whatever you build in your business, make sure there is human oversight over it because it is such an important part and you will get a better result if you do it.”

The head of AlphaZetta concluded: “You need to find out what it is that you want to use the data for and harness it to optimise your business. Where is it that you can apply analytics to actually make money? If you crack it, and you get a competitive advantage, then the value goes directly to you.”

The Adviser Asia Study Tour comprises two days (10 and 11 October) of interactive presentations and seminars revealing how the Asian mortgage market has developed AI strategies to support traditional broking models using robo-advice to enhance the client experience.

Building on themes arising from the previous US and UK study tours, the event once again aims to give forward-thinking brokers and players in the mortgage market critical insights into how their international peers dominate their respective marketplaces.

[Related: The Adviser Study Tour to reveal secrets of Asia’s dominant brokers]