Deploying technology for financial firms

Alexey Sokolin, chief operating officer at wealth management technology provider Vanare, recalls weathering the 2008 financial crash that transformed Wall Street. Mr. Sokolin, 31, watched as colleagues and clients lost the bulk of their life savings, which he saw as a defining moment in his early career. The crisis taught him the importance of financial transparency and the need for better tools for smart wealth management. Today he sees a future in image recognition software and wearable technology as some of those tools, and is convinced that technology will be the next disruptive force to reshape the financial services industry. “At the end of the day, I'm more interested in technology than marketing,” he said. “I don't want to just talk about it. I'm going to build it.”

"A DRIER CLIMATE'

The industry must innovate more, instead of responding to trends that startups create, he said, pointing out that robo-advisers only became popular when they became a legitimate threat. The advice industry is not known for evolving quickly, he said. “It is a drier climate for innovation,” Mr. Sokolin said. “If you want to foster innovation, there needs to be a greater emphasis on those who go that route.” There is a whole world of creative technology outside of wealth management that can be applied to the industry, he said. At a Technology Tools for Today conference in Weston, Fla., earlier this month, he cited a few that easily could be applied to financial services, such as the use of bitcoin and other cryptocurrencies for financial transactions. Better use of image recognition may help advisers get a deeper sense of their clients' interests via their pictures and Google searches. Advisers also may become more efficient by using technology that lets them talk to their computers instead of typing, something that IBM's supercomputer Watson already does.

"LIKE AN ICEBERG'

His message is clear — these technologies are already in the market. And while he says he hopes to have more speaking engagements to educate advisers in the industry, he wants to go a step farther. Mr. Sokolin saw from an early point in his career how imperative technology was to the financial services industry. From 2006 to September 2008, he was an investment management analyst at Lehman Brothers. That experience sparked his interest in his future endeavors, such as building one of the first business-to-business robo-advisers, NestEgg, while he was still studying for his law degree and MBA. But on Sept. 15, 2008, he watched as his peers lost much of their life savings. “It was like an iceberg because nobody knew the company had done anything wrong,” he said. “In two years, I got a lesson of a lifetime.” But there was another lesson no one was focusing on yet, and it had to do with servicing smaller clients. Mr. Sokolin said clients had to have a lot of money to be seen, and as a 21-year-old analyst at the time, that didn't feel right. That became the philosophy behind NestEgg, which he built with two colleagues in an apartment on Columbia University's campus in New York City. With a business-to-consumer robo, there would be a stronger emphasis on marketing to get the word out and attract clients away from advisers. But an adviser-facing robo would enhance the relationship and experience for clients. “I knew I could get way more reach by going where people are, instead of tearing apart existing relationships,” he said. Last December, his instinct proved spot on. Wealth management technology provider Vanare acquired NestEgg and took him on as chief operating officer. “I was just really impressed the minute I met him,” said Rich Cancro, chief executive of Vanare. The two work well in mentoring each other, he said, adding that Mr. Sokolin goes well beyond what his position calls for. He is involved in technology innovation, strategic partnerships and the company's business model. “[He is] irreplaceable,” Mr. Cancro said. “We can talk about problems we want to solve, he will go away and come back with a solution way beyond the expectation I had of what the solution could be.”

BORN IN MOSCOW

Vanare recently released Roboadviser DNA, an open architecture platform for advisers to customize an automated investment platform. The firm also announced Synapse to help advisers with digital client onboarding. In Mr. Sokolin's personal life, his move from Russia to the United States proved to be a first lesson in change and adapting. Mr. Sokolin was born in Moscow in 1984 and lived there until he was 10 years old, when he moved to Bensonhurst, Brooklyn in New York. He said while the experience wasn't traumatic, it probably laid the groundwork for his mindset on growth. Although his parents were highly educated, the family lived on food stamps and welfare before his parents found work. Meanwhile, he focused on learning a new language and adjusting to a better life.

HELPING THOSE IN NEED

His childhood fostered a mentality to appreciate different backgrounds and help those in need, something he still keeps in mind. Emerging technology will forge a better relationship between advisers and future clients, Mr. Sokolin said. For example, millennials will trust advisers more with their raw data, said Patrick Hannon, vice president of enterprise accounts at Advicent. “There is a lot of conversation around millennials and their ability to trust large organizations,” Mr. Hannon said. “It will have to be give and take, but you already see this start to happen with customers trusting Mint with all of their passwords.” Mr. Hannon, who attended Mr. Sokolin's presentation at the T3 conference, said Mr. Sokolin provided a great reminder that technology is going to change the business. “What we think is farther down the road is really much closer than that,” Mr. Hannon said. “I think he is blowing minds right now.” Though technology will make it easier for advisers to do a better and more efficient job, Mr. Sokolin said that at the end of the day, clients will still need a human adviser to hold their hands. “You can only get human advice and counsel, and human warmth, from another person,” Mr. Sokolin said.