Drexel, SEI strap on A.I. headbands so investing is more pleasing to the brain

SEI, the Oaks-based financial-services giant, partnered with Drexel University to research this question: Can artificial intelligence help humans invest and save for retirement?

The results were exceptional – and spooky.

Drexel and SEI measured in the real time how the brain responds when logging on to a computer and checking savings and retirement accounts online. Together, they want to design websites that are more pleasing to the eye and keep users engaged through bigger, more intuitive charts and layout. Clearer language, too.

Participants strapped on a Star Trek-style headband that measures oxygen in the brain – fNIR (for functional near-infrared) technology  – to tell whether checking an online statement is easy, difficult, pleasurable or frustrating.

Human brains fed back into Drexel's fNIR scanners and helped SEI design a website that was more pleasing aesthetically, kept investors more engaged, and allowed the Wall Street firm to create more user-friendly language.

"We asked Drexel how can we create an engaging experience," said Russ Kliman, head of strategic programs and innovation at SEI.

Earlier this month, 37 people — including SEI clients and employees, and some Drexel recruits — performed certain tasks while wearing the fNIR headbands, a technology that has been used for studies in such fields as addiction, aviation, driving and mobile-phone apps.

How does it work? The fNIR electrodes measure brain activity through oxygen consumption by neurons; higher oxygenation levels indicate greater exertion.

What's the point? The easier it is to track account balances and navigate accounts online, the more likely a user will stay engaged in saving and investing.

It turned out, for example, that some SEI website icons weren't intuitive, and neither were the drop-down menus. Some in the study couldn't figure out interactive charts, revealing more data with a mouse rollover, Kliman said.

"Instead of a label saying 'asset allocation,' we changed that to 'how my money's invested', which more people clicked on. This type of cognitive computing and A.I. will impact financial advice going forward," he said.

Said Rajneesh Suri, associate dean of research for Drexel's LeBow College of Business: "This approach to understanding consumers' behavior leads to rich diagnostic information and greater confidence in actions taken by businesses."

SEI has about 8,200 clients, including banks, trust institutions, wealth-management organizations, independent investment advisers, retirement-plan sponsors, corporations, not-for-profit organizations, investment managers, hedge-fund managers, and high-net-worth families. The company builds websites and other "platforms" where financial data is fed into the systems, so consumers can easily access their accounts.

A public company listed on the NASDAQ, SEI also manages or administers $751 billion in hedge, private-equity, mutual-fund and pooled or separately managed assets, including $283 billion in assets under management and $468 billion in client assets under administration.

Al West, SEI's CEO and current chairman, argues that the company he founded is a financial-services firm that should be valued like a technology company.

One trend that's helping SEI is increased Wall Street regulation, such as the Department of Labor's fiduciary rule. (It's been delayed, but many Wall Street firms are complying anyway.)

"That's good for us, because we are now helping our clients handle that fiduciary function," including database, know-your-customer, and anti-money-laundering compliance, West added. "As a tech company, we've figured out a way to automate all of that."

He's closely watching tech stalwarts Netflix, Google and Amazon, which West believes "are leveraging business into the services category," such as with cloud-based computing. "Amazon, in particular, has a recurring business model that we should be looking at."