Interviewer: Venilia Amorim, Content Producer, Clear Path Analysis

Interviewee: Joseph Pinto, Global Chief Operating Officer, AXA Investment Managers

Venilia Amorim: Can there be full on 100% automation and is it a good thing?

Joseph Pinto: The new era of different industries’ automation (including asset management), means humans and machines working side by side. While today automation is used more and more for productivity reasons, in a context of an asset management market/value chain transformation, there is a real opportunity to enable humans and machines to leverage and amplify each other’s strengths. Automation is a good tool helping our operations team to focus on more value-added tasks, with an optimum reachable when effectively are mixed the manual tasks and automated tasks.

Venilia: How challenging is it for operational leaders to implement automation?

Joseph: There are different challenges, from facing a continuous transformation in technology to cultural mindset as it needs to prove its worth by creating opportunities for both business and human workforce. Culturally, it has initially been a challenge as per fear of unemployment, but once employees understood the benefits, with a few proof of concepts, it became a fantastic leverage to focus on reducing the repetitive low added value tasks and increase the time for analysis and client centricity. Other challenges we may face are next employees’ skillsets and new security protocols of different processes. But despite all, it improves the productivity and the wellbeing of the employees.

Venilia: What are the pros and cons of automation?

Joseph: One pros is that it helps increase efficiency within a company—we have been using it in the business growth context, for example. The new market context (fees pressure and the velocity of industry change as per the use of new technologies) makes it difficult to increase the head count so by automating some tasks we have realized that we can achieve more versus what we have been used to without adding new resources. For instance, with our internal risk management reports, which have a risk budget allocation, before automating certain tasks, we could produce two reports a week with a full-time staff. After the automation of these tasks, we have moved from two reports by week to two a day. We could, therefore, benefit from these opportunities to produce more of these reports.

Some other pros are the stability of the process through time and the quality by performing new controls and gather information’s than employee have no time to do.

The cons are that you have to be careful of the way you use it as it cannot be a systematic approach. There are processes that you shouldn’t automate but simplify or stop them. You need to use your common sense so that if a process is still needed you can think about whether you can automate it and if so to what extend. There are many situations where you think you may want to automate a certain task or process but it really would be simpler to just do it manually. Sometimes simplifying things has more power than even automation.

Also, you need to make sure that you have a continuity plan behind it if your ‘robot’ doesn’t work, so be careful of which processes you would like to pick up into your RP programme, i.e. processes that are not too critical where if you were to have an I.T. issue you could still operate.

Venilia: In terms of research, how does automation affect the quality of research and the operational strategy of a company like AXA?

Joseph: We can use automation in some aspects of research but it is probably more about using data science rather than pure automation. For instance, in some reports we have been using natural language processing (NLP), which allows us to simplify the work of some of our portfolio managers beginning with non-listed asset classes. You have a lot of research to go through on the private debt arena; with so much material to read, this has to be done by a professional, who cannot be replaced by a robot as you still need a human to give a judgement on the quality of whatever they will buy or won’t buy in terms of paper. Reading these materials is very important but NLP helps to accelerate this phenomenon by highlighting the key paragraphs and elements that are useful for the analyst or portfolio manager who has to read those documents. Using technology is more than just automation.

Venilia: Do you see any automation trends developing over the next 12-18 months?

Joseph: The thing about automation is that it is just a robot with no brain, it can only replicate the processes that you ask the robot to do. The robot won’t try to find an alternative route if the defined route you have given doesn’t work. This means that by adding to the automation an AI element, you can have more useful information, which could be irrelevant in terms of automation alone. This is a trend that we have seen in the past and one that we will see in the future.

Venilia: Do you feel that this trend will increase overtime?

Joseph: It is hard to say. We are all trying new things and so I suspect that it will increase, although to what extent is very difficult to forecast at this stage. I don’t see why it shouldn’t but I am sure that in the course of implementation we will face other challenges or situations that we will have to overcome.

Venilia: Thank you for sharing your thoughts on this topic.