The AI strategic imperative

Wealth management clients, like customers in many other service-based industries, are increasingly demanding more personalized digitized services. There are trillions of dollars of assets available in the market for those digital-forward wealth management firms that are prepared to go after this opportunity. In short, there’s never been a better time for you to harness artificial intelligence (AI) to deliver greater value to your customers and your business.

But for many firms, that means a big shift in strategy and approach. The call to action is to rapidly move from experimental pockets of AI implementation to exponential expansion of AI capabilities. In other words, you’ve got to scale.

Where wealth managers are on the AI continuum

To sort out the current state of AI in wealth management, we recently interviewed 100 strategy, digital and technology executives representing North American wealth management firms. What we share in our report, AI in Wealth Management: Built to Scale, is that most wealth managers recognize there’s a significant financial opportunity in expanding their use of AI in the short term. But, the majority of them are struggling to get past the proof of concept stage.

Most efforts are taking place within specific areas of the business rather than spread more broadly across the enterprise. The inability to scale is holding them back, and three things are getting in their way:

  1. Getting data controls and protections solidly in place.
  2. Creating the right governance to ensure transparency and trust.
  3. Engaging advisors in new AI-driven ways of working.

Moving from experimental to exponential

There are many proven use cases for AI in wealth management. They cover front, middle and back office. By building on these use cases, wealth managers could more easily make the move from theory to practice, start capturing more value, then extend these practices to create scale―and greater value― across the organization.

The results can deliver as much as a 20% uplift and generate additional revenue from both current clients and new ones, and the more use cases you put in place, the greater your returns could be.

The Future: A digital platform mindset

Our vision is for an AI-enabled wealth management ecosystem that brings forth all kinds of new ways to work with clients, evolve the advisor role and boost productivity. Eventually, that vision will include embedded innovation, where AI is part of a firm’s DNA. To reach that vision, you have to accelerate your AI journey, with an emphasis on scalability. We’ve identified three core actions to kickstart that process:

  1. Honestly evaluate where you are compared to the rest of the industry. This means making sure you’ve laid the groundwork, have the right support and are ready to move fast.
  2. Develop a solid strategy. What do you want AI to accomplish for your firm specifically? Make sure those wants match your plans.
  3. Make two “no regret” moves that you can execute over the next month. These moves should align with your strategy and capabilities and deliver the results you want.

Every firm is on its own path to AI-enablement, and some might still have a long way to go. Still, the industry as a whole agrees AI is a transformative force that is picking up speed and everyone should get on board. That being said, reaping the benefits requires a deliberate plan and aligned investments that target the right insights and capabilities to deliver the right results for your business. One thing is clear―the time to act is now.

Get more information on how to accelerate your AI journey through scalability in our report: AI in Wealth Management: Built to Scale

Scott Reddel

Scott Reddel

Managing Director – Wealth Management Lead

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