If you’re not living under a rock, you’ve probably heard of a few ways artificial intelligence (AI) is making an impact in a lot of people’s professional and personal lives. But how can it benefit the wealth management industry, specifically?
Artificial intelligence (AI) for wealth management has the potential to advance it in several ways, and has already been rapidly doing so by using it to generate content for clients and protect their assets. It’s one of the reasons that the wealth management industry is likely to function dramatically differently by 2030.
Here are some ways that wealth management companies can benefit from AI:
1. Faster, more personalized, smoother customer service:
AI-powered virtual assistants and chatbots can provide 24/7 support to clients, helping them answer questions and resolve issues quickly and efficiently. In an industry built on communication and advice such as wealth management, being able to answer your client’s questions anytime, anywhere is a significant advantage. Even if a human financial advisor is present, they can use AI to pull up answers to questions and ask for suggestions on next steps.
The benefits of a chatbot are vast, ranging from saving time on customer service, being available to respond instantly in multiple languages, and capturing your customer’s data that they submit themselves. If you’re using generative AI like ChatGPT, you can ask it to generate sample customer service dialogue for you if you’re ever stuck on what to say. For example, it can generate a sample email describing why you chose the advice you did.
(Stay tuned for more of our thoughts on chatbots to be posted soon!)
2. Creating sample personalized plans, portfolios, investment offerings, and more:
AI algorithms can analyze vast amounts of data to help wealth management companies to generate content that meet each client’s risk level, investment degree, overall expectations, and other unique preferences. It would use past industry data and personal data from past interactions with the client to deliver personalized information that meets current industry standards. These generated portfolios can give wealth advisors a more defined starting point to move forward from. If an advisor needs help on how to communicate their work more concisely or efficiently, AI can help draft a summary.
3. Predictive analytics:
AI can analyze data from a variety of sources to make predictions about market trends and investment opportunities. This can help wealth management companies stay ahead of the curve and make informed decisions about portfolio construction that are sustainable for the current and future economy and their client needs. AI can also structure the data so it’s neither too unorganized or too siloed.
4. Fraud detection:
AI algorithms can quickly identify suspicious activity and detect potential fraud, helping wealth management companies maintain the security of their clients’ assets. They can also send automated alerts when suspicious activity has been detected so customers can resolve them quickly rather than have to call the institution to confirm the fraud or authorize a false alarm. Many banks already use systems to detect and block transactions flagged by AI.
5. Adherence to compliance
The wealth management industry is understandably heavily regulated to protect everyone’s assets, which means wealth advisors have a lot of compliance information they need to retain. AI can help summarize this information and be programmed to detect any compliance risks or violations in an advisor’s work, making it easier to stay compliant and to protect the client’s personal information.
6. Overall increased efficiency and more time to build human relationships:
One of the biggest general value propositions of AI is the automation of many manual tasks. For wealth management professionals, that looks like having more time to spend on more human-centric tasks such as client engagement and building genuine relationships with the people whose wealth they’re managing, staying on top of life changes that may affect their financial decisions.
That’s actually something Salesforce Financial Services Cloud can also help with by sending notifications of a client’s milestone event likely to impact their finances, such as the purchase of a new house.
According to a recent McKinsey report, wealth advisors are on the road to becoming more like “life coaches”, with AI responsible for much of that evolution. Wealth management leaders are already feeling its positive impact on their workforces and customers.
AI can go far in supporting wealth management across a wide range of clients, making the overall experience much more personalized rather than plain and transactional, as well as safer, more efficient, and more engaging. With financial advisors needing to spend less time on work AI can handle, they’ll be able to spend more time on each appointment getting to know their clients as human beings rather than hurry off to the next client. Those human relationships can go a long way in building trust and solid relationships, making it more likely a client will stick around.
As AI technology continues to evolve, wealth management companies that invest in this area will be well positioned to remain competitive in the years ahead and will develop more use cases.
