In the last week, after initial waving potential issues with the Boeing 737 Max, the have now worldwide be grounded until more is known about the cause of the crash of 2 of those planes in 5 months. Investigations have shown that the path before crash of the 2 planes were very similar and that there are potential underlying issues with the technology of the plane. Some have quoted that the technology has become too complex and is even not understood by pilot. In the specific case of the Boeing 737 Max the technology/system prevents the aircraft from pointing upwards at too high an angle, where it could lose its lift. However, according to filings with the US Aviation Safety Reporting System, which pilots use to disclose information anonymously, it appeared to force the nose down. Not being a pilot I assume this can only be corrected by human intervention.
So bringing this situation back to the use of Fintech in Investment Management (and yes we can only loose money and not lives), do we understand well enough Robo Advice, AI, Blockchain to fully rely upon. Are they becoming our automatic pilots and who in the case of a nose dive can intervene ?
Think of a scenario of some kind of financial crisis and the impact on index funds. Would the technology used to manage these funds just spiral them to the bottom when prices are going down and investors start pulling money out ? Is the temporary closure of such funds the human intervention of the automatic pilot ?
I would be interested to know from specialists in the field @Christopher New, @Paul Smillie, @Simon Cornwell, @Christian Thomas, @Mark Holmes, @Angela Lloyd-Jones, @Andy Milner
An interesting short video on the US regulation climate:
A Regulatory Perspective on Robo’s
The regulatory landscape continues to evolve as it tries to keep up with robos and digital advice platforms. Luis Garcia of ACA Compliance Group breaks down SEC exam focus areas and compliance