Whether artificial intelligence (AI) will eat away their jobs is a question that has given employees sleepless nights across industries and sectors. Employers, on the other hand, are debating the possibility of technology helping them do what they have been doing till now in a more economical way and at a greater speed, saving costs and enhancing client experience. Wealth management is one sector where AI appears to have been embraced to augment the competence of wealth managers. Wealth-management firms are already using AI to empower wealth managers instead of substituting them. Wipro’s ‘AI in Wealth Management: Navigating an Evolving Data-Driven Landscape’ report tells us how.
In the process of empowering wealth managers with AI, the role of human advisors is not only indispensable but essential. The expertise of wealth managers is being augmented using AI, so that they are able to ensure better and more personalised advice.
A significant 61 per cent of wealth-management firms are promoting cross-functional collaboration to maximise the benefits of AI. They have realised how important it is to bring together different departments to work seamlessly using AI-driven tools. Sixty-eight per cent of firms are prioritising training existing staff and hiring new talent with AI expertise. In comparison to 61 per cent extensive AI users, 73 per cent of moderate users emphasise the need to address the skills gap.
Sixty-two per cent of firms are developing robust data strategies to support their AI initiatives, with 61 per cent of extensive users emphasising the importance of cross-functional collaboration.
About 55 per cent of firms are investing in change-management initiatives to ensure a smooth transition as they integrate AI technologies into their operations.
The survey revealed the existence of significant skills gap in the industry in terms of AI implementation and usage. To benefit from effective use of AI to maintain an edge, it is essential to first close this gap. Also, it is important for clients to trust AI too. In the wealth-management space, clients appear to be more open to embracing AI. However, they are more focused on the outcome and the value AI is going to add to their relationship with their wealth advisor.
The report suggests that AI, if centred around client needs, can add great value in wealth management. In fact, 70 per cent of extensive AI users accept that technology plays a big role in enhancing client interactions. Therefore, firms should focus on how AI can deliver concrete value to clients. This will require relying on AI to provide deeper insights, more personalised advice, or new digital services that add value to the client experience.
It also suggests promoting cross-functional collaboration. About 61 per cent of firms are promoting cross-functional collaboration, breaking down silos within the organisation so that AI’s potential is maximised. Firms need to encourage collaboration between data scientists, financial advisors, compliance officers, and IT professionals to ensure AI initiatives are in line with the objectives of the business even while fulfilling the needs of the client.
In addition to this, targeted training and talent-acquisition strategies will be required to close the skills gap and meaningfully integrate AI across functions.
There is data that proves 73 per cent of extensive AI users in the wealth management space have experienced significant competitive advantage and see further potential. A whopping 77 per cent of users report better decision-making with AI-driven predictive analytics. About 76 per cent admit to having witnessed overall operational efficiency improvements.
The key challenge is regulatory compliance, say 55 per cent of users, while 52 per cent highlight the need for robust data governance for effective management of AI-driven initiatives.
It is quite clear that AI can enhance client experiences, drive operational efficiencies, navigate complex regulatory landscapes, and also empower human advisors. With the support of AI, wealth managers can streamline operations, offer more personalised services, and identify new revenue sources, taking off a lot of pressure on profit margins.
What is to be remembered is that mere implementation of technology will not suffice for successful integration of AI. There is a need to foster a culture that is open to change and innovation; a culture that welcomes and accepts AI. After all, early AI adopters will be able to stay in the lead. This is applicable not just to the wealth-management space but to all sectors that wish to see new avenues for growth and profitability.