It's no secret that the wealth management industry has undergone a significant transformation in recent years. The rise of Robo-advisors and competitive pressure to digitize the client experience has nearly made it mandatory for firms to be digitally-focused and offer services such as financial planning and portfolio monitoring that seamlessly integrate across channels. However, the changes present many challenges to financial institutions that they must tackle if they want to remain competitive.
In the race to grab wealth management market share, firms utilize AI and other advanced analytics to automate and streamline high-value workflows such as financial planning, modeling, and insights. That's attractive because it delivers a compelling value proposition for clients but also because it's critical to sustaining profitable revenue growth amid industry headwinds.
In a recent report from Stratus, more than 65% of financial advisors now see advanced technologies such as AI, machine learning, and predictive analytics as game-changing opportunities for bringing new advisors into the fold.
Increasing the pace of AI development
Artificial intelligence is shaping up to be the most disruptive upcoming technology, given the current rate of technological growth. Almost every sector is starting to use artificial intelligence (AI) to automate operations and make faster business choices. As organizations learn from their initial use cases and the potential becomes apparent, AI quickly moves to a C-suite priority. However, fully achieving that potential is even more difficult. According to our survey results, 76 percent of CEOs are unsure how to scale AI throughout their organizations.
- Wealth management firms must define the role of their advisors in AI-driven services and empower them to adapt, innovate and offer new value to justify their fee or risk losing them altogether.
- Protect and enhance your data, security, and governance; End-to-end encryption, automated data discovery, and management; Automated discovery, analysis, and action.
- Wealth managers should decide when it is essential to implement AI.
A common theme among companies leading with AI is that they start with a problem they want to solve. From there, they establish a clear hypothesis as to why a particular AI approach will provide the best solution. Finally, they collect and analyze the data resulting from the experiment to determine if the initial hypothesis was validated or not.
A digital platform approach is the way of the future
The disruptive impacts of innovation are already felt in the wealth management space. Still, as artificial intelligence (AI) becomes more mainstream, it is poised to radically reshape the industry by making available sophisticated products and services that currently exist only in the imaginations of science fiction authors. These advances will create opportunities for wealth managers to increase productivity, cut operating costs, and provide new offerings to clients.
Artificial intelligence (AI) can improve productivity and deliver transformational capabilities for financial advisors. While many early adopters are already implementing cutting-edge technologies, others have yet to realize its strategic value. Adopting AI will impact firms in two ways — how they conduct business today and how they take advantage of emerging trends.
Wealth management is poised for another significant transformation. Organizations will increasingly embrace artificial intelligence and integrate it into their business processes, allowing them to engage clients more efficiently and effectively, improve operational efficiencies, and positively impact the business and their communities. The key to success won't just be adopting AI but also training an organization's people and the technology itself to ensure that all stakeholders are ready for AI's numerous benefits.