BENGALURU: Artificial Intelligence (AI)- driven innovation can transform wealth management services, as it can offer new ways to enhance client experiences. As AI continues to develop, it presents wealth management firms with opportunities to achieve higher levels of personalisation, generate deeper insights, and create more value for clients, says Wipro in its report, 'AI in Wealth Management: Navigating an Evolving Data-Driven Landscape'.
The data reveals that 44% of firms are already using AI extensively with robust usage policies in place at 28% of these firms, and about 56% report moderate usage, predominantly with some policies in place. The report, based on a survey conducted among 100 executives in the US, examines how AI is changing the wealth management landscape.
It points out that 73% of extensive AI users believe AI can provide their organisation with significant competitive advantage. The company’s research identifies trends that wealth managers expect to be most disruptive in the next five years. About 57% of firms expect natural language processing for client integration, including engaging with clients through chatbots for questions, updates, and transactions, to be impactful.
Also, advanced technologies such as autonomous AI Fiduciaries capable of making ethical investment decisions, blockchain-enhanced AI systems for unprecedented security, and AI-driven quantum computing for financial modelling, are on the industry’s radar.
However, Wipro industry experts caution that firms may be overestimating their readiness, as well as the effectiveness of their AI usage policies, potentially leading to operational and compliance challenges.
Navigating regulatory challenges with AI
Its research indicates that 68% of firms are focusing on ethical and regulatory considerations in their AI implementations, and 55% of firms regard regulatory and compliance challenges as a significant barrier to AI adoption.
About 62% of firms regard the lack of regulatory guidelines as a top challenge in AI adoption.
When it comes to AI implementation and usage, the data highlights the significant skills gap that exists in the industry and stresses on the need to close this gap in order to leverage AI effectively.
“These findings suggest that AI offers wealth management firms a chance to innovate, stand out, and succeed in an increasingly competitive market,” said Ritesh Talapatra, vice-president and sector head for capital markets and insurance at Wipro Limited.
“This technological shift comes at a time when the industry faces several
challenges, including pressures on assets under management, fluctuating revenues, increasing operational costs, and rising client expectations. In this context, AI emerges as a powerful tool to deliver customised wealth management guidance, optimised client satisfaction, and maximised financial returns,” he added.