My latest addition to changeisanopporunity is around the democratisation caused by digital technologies, using Nutmeg, an online investment management site which makes clear that anyone, even with small amounts of money can invest – and at costs which make it attractive to do so. This is achieved through the use of algorithms in this instance but it is just the tip of the iceberg – data and analytics (both descriptive and predictive), machine learning and automation are all contributing to this trend. And as sensors are increasingly embedded in everything we touch and use, the internet of things will make all of this even more feasible and cheaper. At one level therefore technology is a real driver of democratisation – opening up privileged areas to a much wider population, and making expertise transparent and accessible rather than scarce and expensive – in that sense this is another aspect of abundance from scarcity.
But does the democratisation solve all problems? Does everyone have both the access and the capability to use the technology needed? Does everyone understand the implications of engaging (not just investment management but whatever platform transactions they are joining)?And does the transparency over costs and the comparison with traditional routes provide a complete view of the opportunity here? And let’s not forget that investment management is by its nature regulated to protect those who may be vulnerable but not every industry where digital democratisation is occurring has the same levels of oversight. . .
So this democratisation brings with it ethical questions as to where responsibility for decisions rests – and the extent to which making something simple to do, and cheap to achieve is sufficient of itself – or does it bring additional responsibilities?