Angel One has developed an AI system called ARQ that is designed to support people in their investments and meet financial goals.
Mumbai: When Tony Stark is Iron Man, he’s usually on his own while battling villains and cosmic menaces. But he doesn’t fly solo. Anyone who saw the Iron Man movies will recollect that Stark’s suit was patched into an artificially intelligent computer program named J.A.R.V.I.S. that ran his lab and home.
A stock broking firm is bringing this science fiction scenario day by day closer to reality. Unlike Iron Man’s Jarvis, this technology won’t be just for Stark. It has developed an AI system called ARQ that’s designed to support people in their investments and meet financial goals.
Established in 1987, stock-broking and Wealth Management firm Angel One is transforming itself from a traditional broking house to digitally-savvy retail broking firm with superior online capabilities and innovative offerings, says Gagan Singla, CMO of the company who speaks on the company’s recent successful technology roll-outs aimed at making the organization more customer-friendly, agile and efficient. While some of these initiatives are focused on Customer Acquisition, Servicing and Marketing, the company has also launched digital initiatives aimed at strengthening its Human Resources (HR).
Q1. How are you re-inventing Angel One as a technology-driven retail brokerage with digital as the central theme having superior online capabilities and innovative offerings?
Societal trends driven by the digital revolution are changing consumer behavior. We live in an age of micro-moments where speed is of essence. Customers want quick processes and apps for their usage. In such a scenario we need to make something as mundane as opening an account speedy, and in within a minute. In fact, we are now working on a one minute process to open an account, and that day is not far when an account can be opened in few seconds.
There is no point in opening an account fast and not being able to trade for few days. That’s when we said we that once the e-KYC is done online, a customer can start trading in an hour. This was about a year back. The development and emergence of new mobile technologies along with opening of government regulations is aiding us in achieving this.
Another area that we have been focusing is around the use of analytics to provide better services for customers, basis the data that we have. Understanding customer behavior patterns has helped us to generate personalized next-best offerings, for example, can we provide a tool to users on how they can manage their finances efficiently?
Q2. Can you elaborate with some examples of how you are using analytics internally and/or for customers?
Digitization has changed the way we process and analyze information. One example of analytics is for mail classification into categories. By using machine learning we have automated these tasks, and made the whole process super-fast and efficient. When customers send us mails they are automatically read by a machine and assigned to the right person who will respond to that mail. In some cases we have created an automated response. Mails are also categorized by the machine basis the urgency. Keywords are captured to understand this mechanism.
We are working on an app called Angel Wealth, which is already launched in its beta form. The app is about goal planning and here we can really push the envelope. Broadly speaking this app is built to help people reach their financial goals, and helps them to accumulate that money by suggesting ways to save and invest. This in a way is a smart Artificial Intelligence (AI) app. This is one way that we are looking to provide value to customers.
Q3. ARQ has been the most significant offering from you that promises to transform the way retail investors seek and consume investment advice. How did you go on building or creating ARQ, an intelligent investment engine for retail investors powered by the combined strength of machine learning, cognitive technology and deep industry insights?
ARQ is a hyper intelligent investment engine that has some great algorithms built-in. It is a high-tech automated investment advice-cum-Wealth Management service that uses advanced nature-based algorithms, quantitative analysis and the Nobel-prize winning Modern Portfolio Theory to enable personalized investment advice to help users get better returns on their investments.
I was actively involved in the initial round of its development. We built our own innovation platform rather taking help from any service provider. A 12-member data science team was created. We have used some nature-based algorithms in creating ARQ. For example, we have put together algorithms like how birds are foraging or in flight, fish swimming pattern motion algorithm etc.
ARQ offers personalized investment advice based on an individual’s financial goals and risk profile, among different asset classes. For example, it will tell a user if they need to keep stocks that they are holding or churn into different stocks. All this happens real-time and it keeps taking data and updates it. It processes terra-flops of historical data on Mutual Fund Schemes and Stock Markets and recommends only the best investment strategy out of billions of possible combinations. The results are back tested by us and the simulations have proven that ARQ performs exceptionally well in every market condition, consistently outperforming the benchmark by a significant margin.
Q4. What have been the results achieved with ARQ? How has it contributed to your overall business, both in terms of growth and customer retention?
The performance witnessed by ARQ against the benchmark index has been well received. Mutual Fund recommendations from the engine have beaten the benchmarks substantially in its first year of operations. It is an indication that consumers are more receptive towards not just technology, but data-backed technology that delivers results, especially during market volatility. In the last two years we have grown 300 percent in terms of volume acquisition and at a lower cost of acquisition.
Normally, growth of acquisition translates into higher costs, but we have lowered it.
In a micro-moment world, retention of users is a key factor. On the customer front, 99 percent of people who have been using ARQ have continued to do so. I am sure there must be some value that customers are getting out of it. Internally, we are focusing more on the experience delivered by ARQ rather than merely user retention. All our digital platforms are powered by ARQ and around 75 percent of our revenues come from the online/digital model.
Q5. Are users having real feelings for ARQ as it is designed to meet customer’s financial needs and many can fall for it?
ARQ is not a platform, it is a passionate entity. I have been told that there are some people who want to quit their jobs, invest in ARQ and make it is as their source of livelihood. So yes, in a way, some have started to fall for it. It is a thought process or thinking of the digital ecosystem where people can work around for their financial needs and in turn ARQ continuously learns and helps them to make sure that they achieve their goals. The Angel Wealth Beta is also powered by ARQ.