Nik Modi: Future Analysis for Investment Insights
While some people think about a five-year plan, Nik Modi prefers to look much further into the future. As a managing directing at RBC Capital Markets, an affiliate of City National Bank, Modi has a keen grasp on financial analytics. He and his team have produced Imagine: Preparing for Hyperdrive, an in-depth report based on surveys and research into more than 1,400 companies that identifies the disruptive forces that will transform the world in the decades ahead.
Modi, a sell-side analyst for more than 15 years, joined RBC Capital Markets in 2013. He focuses on industries such as beverages, household personal care and packaged goods. Modi consistently ranks among the top analysts in surveys done by financial media such as the Wall Street Journal, Fortune and Forbes.
“Covering these diverse segments taught me something important: Everything is connected," Modi said. “There are lessons from each sector that can be relevant to all the other sectors."
Modi recently joined Rich Raffetto, president of City National Bank, for a conversation about the challenges and opportunities of the future and how cross-sector collaboration can make everyone from investors, to consumers, to company leaders smarter.
RBC's Imagine report identifies five themes that will define the future and provides a framework for Modi and Raffetto's discussion.
The Quest for Immortality
While humans haven't found a way to stop aging, they've certainly moved toward slowing its effects.
RBC's researchers noted scientific breakthroughs that impact life expectancy and have elevated the prospect of people living for centuries. While this means a larger market for many industries, it also means a new audience. They predict that companies will need to adapt as customer acquisition costs may rise as people live longer in retirement.
“But even if acquisition costs are higher, the return on investment will likely increase too," said Modi.
Increased longevity can also raise the importance of self-care to sustain health, which could encourage companies to invest in that category. A related topic is wellness, which could mean investing in brands related to people's wellbeing or those marketed around stress reduction.
Modi also mentioned that new medical device innovations will help people obtain proactive medical care as they live longer.
Among the intriguing innovations Modi mentioned is Tufts University's tooth sensor that collects data from people's mouths for early identification of antibodies, bacteria and viruses.
The Individual Revolution
Over the past two decades, increasing distrust of institutions, the rise of social media and the abundance of data collection have influenced multiple social and economic trends. More than ever, individuals have shifted into focus — increasing their influence on society and their ability to move within it.
“Part of the broader loss of trust in institutions is the lack of engagement among employees, particularly younger employees," said Modi. “Workers who are less engaged have more of a propensity to leave their jobs."
Thanks to the individual revolution, workers want flexibility and are anticipated to increasingly embrace a broad category of arrangements such as gig work, freelancing, independent contracting, temporary work and on-call work.
Intertwined with this theme of individual control over their work is the desire for people to control their data and find ways to leverage it.
Social media sites like TikTok and Instagram mean more individuals influence products and purchases, so more companies are expected to partner with influencers to reach consumers, said Modi.
Artificial Intelligence Activated
Modi anticipates more companies will invest in artificial intelligence to layer over data collection for better decision making, to improve flexibility and to increase flexibility.
“AI can be used as part of the shift from mass marketing to individualized marketing and can be leveraged to drive sales," Modi said.
For example, one coffee company has a smart brewing system that records the type of coffee being used and then provides automatic replenishing.
While AI is opening doors to new types of marketing, Modi remarked that companies aren't prepared to take advantage of it.
“The challenge with AI is that many companies are behind the curve in investing in AI," said Modi. “Partnerships and acquisitions may be the solution for companies that are too far behind."
Cocooning and the reduction of physical and social interaction was already happening before the pandemic accelerated those trends, Modi commented. He predicted that hybrid living won't just change the way people work — it will change the way they socialize.
Particularly among younger people, the personal environment is increasingly focused on virtual spaces rather than physical spaces, said Modi, and companies need to learn to take advantage of that. Not only do companies need to reimagine their corporate culture, but brands related to physical interactions need to rethink how they can build occasions in the virtual world.
For example, a recent virtual concert with an audience of 20 million people didn't have a single brand or service as an advertising sponsor. Modi pointed out that many companies are currently overlooking these opportunities, while sponsoring in-person events that have a fraction of the reach.
The Great Balancing Act
The pace of societal transformation, climate change and the declining trust in institutions has the potential to create global destabilization, said Modi. He pointed to the divide between developing and developed countries that could be bridged by creative use of existing technologies.
“Most of our technology and talent is underused," said Modi. “We should all be thinking about how to leverage our existing technology to create a more equitable future across the globe."
You can catch the rest of the conversation between Nik Modi and Rich Raffetto by listening to the full podcast above. For more, download the full report here.
This article is for general information and education only. It is provided as a courtesy to the clients and friends of City National Bank (City National). City National does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors or persons quoted as of the date of the article with no obligation to update or notify of inaccuracy or change. This article may not be reproduced, distributed or further published by any person without the written consent of City National. Please cite source when quoting.
This podcast is for general information and education only and is provided as a courtesy to the clients and friends of City National Bank. It is compiled from data and sources believed to be reliable, however City National Bank does not warrant that it is accurate or complete. Opinions expressed and estimates given are those of the speaker as of the date of the podcast with no obligation to update or notify of inaccuracy or change.
This content is based on information and analysis from RBC Imagine – Preparing for Hyperdrive, a landmark report authored by RBC Capital Markets’ Global Research team. Highlights from this report were published in March 2022 and the full report was originally published on November 18, 2021. Please visit RBC Imagine to learn more and download the report.