Altogether, 51% of firms say they are currently working on AI projects. This is one of the results of the latest survey on AI in wealth management conducted by F2 Strategy Inc., the North American wealthtech company. The report includes responses from registered investment advisors (RIA), wealth management firms, and asset management firms representing USD 6 trillion in assets.
Exploring the Possibilities
The focus areas of possible AI use are predictive analytics, optical character recognition, workflow automation, natural language processes, and chatbots. Firms say they are keen to explore how AI can be applied to enhance various aspects of their business, including client experience, efficiency, and growth. Some successful tools are already in use; for example, the firms say they spend 90% less time on transcription when using AI to help.
More Knowledge on AI
Many wealth managers express a strong desire to learn more about AI’s real-world applications. In a self-assessment, 62% of wealth management firms rated their knowledge of AI at 5 out of 10 or lower. Especially wealth management firms want to see not only successful AI implementations but also the risks of AI technology. Many also want to understand the role regulatory agencies will play in its use.
Seeking additional Benefits
Wealth management firms recognise opportunity with AI, particularly generative AI, believing they can achieve additional benefits as AI functionality matures and becomes available. Firms indicate they are proceeding with caution, citing big concerns about maintaining high levels of data security and complying with looming regulatory requirements. Budget constraints, issues with data quality, and competing priorities also factor into their decisions to invest in AI technology.
Cooperation with Sellers
With the rise of technology in the wealth management industry, according to the F2 Strategic survey, 74% of wealth managers expect to move their AI plans forward by working closely with sellers. Many respondents report participating in beta test groups with vendors that are developing new ideas to provide feedback. Only 18% are going hands-off by saying they will rely completely on sellers, and 8% say they will develop internal firm capabilities.
AI and personalised Solutions
There is a demand among wealth managers for broadening their retail presence through AI and robo-advice to offer the kind of personalised solutions that would once have been reserved for high-net-worth clients. The need to develop a hybrid human-digital delivery model is also being recognized. At the same time, AI risks among investors, employees, and regulators must be managed by maintaining robust governance and data protection while being responsive to concerns about data privacy, stewardship, and unintended consequences.
Simplification and Analysis
Especially in the wealth management sector, the emphasis is on analysing and simplifying complex tasks. For example, investment research is a critical aspect of wealth management. AI can identify trends and potential investment opportunities. Thus, informed investment decisions can be made. By analysing vast amounts of market and economic data, AI can forecast potential downturns or volatile periods. This enables the managers to take timely action, safeguarding clients’ portfolios and building a secure investment environment.
