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How can artificial intelligence change wealth industry
How can digital tools and AI technology narrow the gap between ordinary retail investors and professional advisors in wealth management industry and how can behavioral patterns of millennials influence the sector?
This is a user generated content for MyStory, a YourStory initiative to enable its community to contribute and have their voices heard. The views and writings here reflect that of the author and not of YourStory.
Big firms adapting sophisticated technologies
As the preferences of the customers grow, big players are trying to implement the latest technologies and surprise their clients. The wealth management industry is not an exception. It’s clear from my findings that financial firms are about to integrate an Uber-like user experience and to work with the latest technologies such as virtual reality, 3D in order to better illustrate market’s tendencies, trading strategies and help clients to make a rational financial decision and become more informed and engaged.
Many financial institutes, for example, such banks as Wells Fargo, BNP Paribas, CitiBank, use VR and 3D every day for a diverse set of tasks, ranging from marketing to virtual walkthroughs with clients and wealth management companies are likely to follow suit soon. As an option, virtual reality can be used by tech-savvy advisors in simulating client meetings when training new customer service employees.
Millennials seek for the latest technological solutions
Whilst being the largest adult segment, Millennials are expected to grow their wealth significantly in the next years, which means a meaningful increase of liquid assets. Wealth managers should start focusing on that generation because today more than two-thirds of the wealth managers’ clients are over the age of 60, what can lead to great changes in the sector.
Without a doubt, behavioral patterns of millennials differ significantly from the pattern of older generations: millennials highly demand and make use of technological advances, they are used to on-demand, easy-to-use apps, and instantaneous feedback.
They still value face-to-face meetings for investment advice, however, they are more likely to perceive sophisticated technology as a way to communicate and invest, relying on big data analysis that artificial intelligence (AI) can provide.
Today robotic process automation (RPA) is poised to augment the work of traditional human advisors. However, there are still firms that specialize in wealth management and rely on old-line, 20-year-old software. We are entering an era of AI-based tools, data-powered systems and RPA and companies should adopt such technologies to be in high demand among millennials.
Today’s robot-advisors are used to extract value from big data, enable self-service, deliver automated advice and typically offer clients different ways of investing his or her money. More wealth management firms will start to leverage AI to serve each of their clients equally, regardless of their net worth, and will implement it via an AI-as-a-Service model for all types of retail investors and traders.
The gap between market’s newcomers and professional advisors
The jargon, lack of understanding how a market works sometimes create emotional distance and a perceived lack of transparency around what someone’s investments are. With the use of AI and digital tools, it is possible to remove significant barriers for newcomers and current market participants: platforms based on modern technologies will serve complex investment needs, make transactions more transparent and communication between professional advisors and ordinary retail investors more open.
Markets will be more accessible to average investors regardless of the background because with the help of robots the system will be able to generate thousands of trading ideas, rank them by profitability, and offer relevant trading strategies.