Applied Intelligence (AI), the spectrum from advanced analytics to true artificial intelligence, has been long-heralded as a “next big thing” in wealth management. However, the industry has reached an inflection point for finally moving beyond hype to real value. A confluence of advancement in data, platforms and cloud computing underpin a greater understanding of how AI should be applied and adopted to unlock business value.

AI can deliver benefits across the entire wealth management ecosystem―from front to middle to back office. However, the primary focus of application continues to be on middle and back office applications that drive greater efficiency. We believe wealth managers would get greater transformational benefit from AI applied across the entire wealth management ecosystem. It all begins at the core of advice―with the client.

Our recent survey, AI in Wealth Management: Built to Scale, indicated the most long-term value for AI is perceived to be in the front office, where 71% of respondents see it as transforming the client advisor relationship in the next year, and 100% within three years.

From prospecting for new clients to presenting personalized offerings to anticipating and safe-guarding the transfer of wealth, AI in the front office can help advisors get more benefits from AI―better.

AI in the front office represents the intersection between the capabilities the technology offers and the personalized experiences clients are coming to expect. So, what’s getting in the way?

Part of the problem is that large wealth managers and banks have lots of client data, but limited insights. Only a small sliver of data is put to good use in building a picture of a client relationship, their lives and affinities. That needs to change.

Seeing is believing

Based on our research, we think firms should be heavily focusing their AI in the front office efforts on three specific areas of application, right now:

  1. Prospecting and client acquisition
  2. Personalization and differentiation
  3. Wealth transfer

What follows are a few examples of how we’ve helped firms of all types, sizes and strategies implement AI in the front office across these three areas of application to bring benefits to their businesses.

Improving prospecting and client acquisition

We helped a U.S. retail digital bank achieve a 30% uplift in click-through rates, a 50% increase in approval rates and a 40% reduction in cost per acquisition by creating a more personalized digital experience. These accomplishments were based on mining insights from more than two terabytes of external data on 10 million high-quality prospects.

Achieving scale through personalization and differentiation

To understand the relationship between large scale, advisor-driven price discounting and client behavior―with an eye toward avoiding revenue leakage―we designed for one of our clients an AI-powered pricing solution and simulation engine that yields customized pricing recommendations. With this new comprehensive pricing solution, the firm has greater control from the home office and is reaping a multi-million-dollar annual benefit.

We also developed for another client an AI-powered liabilities product recommendation engine that prioritized micro-segmentation to increase penetration of lending products, creating an opportunity for 30% lending growth and adding billions of dollars to the current liabilities held at the firm.

Taking the long view on wealth transfer

By integrating Salesforce™ into one client’s next-best-action engine, we were able to help them glean crucial client insights that enabled proactive actions around life events, investment activity and service alerts. By combining machine learning with CRM, the client has a better opportunity to improve ROI through engaging its clients in products and services tailored to their needs.

Right person, right product, right time

By exploring some key questions, you can formulate your strategy for applying AI in the front office to your best advantage:

  • Improving prospecting and client acquisition: What are you currently doing to identify and convert new prospects? Are you taking advantage of your existing clientele’s contacts and networks to mine for new prospects? Getting the right advice to the right person at the right time should be the name of the game of client engagement and experience.
  • Achieving scale through personalization and differentiation: How are you using data and insights to scale? Are you able to serve up differentiated offers depending on client needs and circumstances? For example, do you know which clients have liquidity or insurance needs? There are potential revenue opportunities in pitching the right person the right product at the right time.
  • Taking the long view on wealth transfer: Wealth transfer is a potential gold mine of opportunity. According to our recent Wealth Management C-Level Survey, we are on the cusp of one of the largest intergenerational wealth transfers in history. How do you intend to engage the next generation when its relationship to you and advice in general is vastly different? It’s imperative that advisors look across the entire life cycle of wealth management to avoid asset leakage when wealth is transferred to beneficiaries, and to reach out to clients in the way that most resonates with them.

From insights to actions

Crunching the data and gleaning the insights is just the beginning. Making AI in the front office work for your firm requires giving advisors actionable insights and a method to deliver on them. And, your engagement model should extend beyond technology to include cultural transformation. All the technology in the world does no good without whole scale adoption across your firm. In this world of high-tech, there’s an essential human component to making it work.

While employing digitally savvy advisors is undoubtedly an advantage, firms should be able to bring all employees into the fold, regardless of their level of technology expertise. This requires a refined approach that recognizes everyone brings a different perspective to the table. You should find a way to unite everyone in the organization―from old school to digital native―around a common goal.

One of the best ways to do that is to build upon and communicate the success of pilot projects―followed by ensuring everyone is well-trained on how to use the technology. When people can see tangible value in an effort, understand their role in increasing that value and feel comfortable with the process, they will be more likely to embrace the change.

No matter where you choose to start in implementing AI in the front office, make your journey a combination of strategy, technology and culture. And start now.

For more information on how to integrate AI into your front office, download our report: AI in Wealth Management: Built to Scale.

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