Over the past decade, we’ve seen technology permeate and define each and every industry and wealth management is no different. As we close in on the decade, let’s recap how technology has affected the Wealth Management industry over the past 10 years, the milestones achieved and the challenges that are yet to be addressed.

Customers are Younger

One of the major shifts that have necessitated technology adoption is the fact that the new breed of HNWIs are tech-savvy and favor a ‘high-touch’ experience. This means that firms are exploring the use of Artificial Intelligence to deliver better client experiences that can satisfy demanding HNIs.

Data is the New Gold

Organizations are increasingly implementing technologies for storing and managing data. There has been the evolution of wealth management platforms and investment management technologies that can track every data point once a customer has been digitally onboarded.

AI is Automating New Processes

Other than conventional processes such as KYC and onboarding, AI is increasingly being used to enhance the client experience. Robo-advisory services that automate the entire wealth management process are on the rise. The customer now has the option to opt for a completely digital solution where AI recommends the entire investment strategy for the customer based on their risk appetite and investment horizon.

AI is Driving Investment Insights

Real-time analytics is being used to drive the investment strategy. Nowadays Wealth Management platforms are now able to crunch through terabytes of data to arrive at investment decisions in no time. AI is able to run projections based on several variables in seconds rather than hours.

Front Office & Back Office are Melding

Earlier most of the technological innovation happening in the Fintech sector was limited to the back office. Front office wealth managers stayed at odds saying that AI-generated ideas were not meeting the needs of the clients. However, nowadays, the front office is increasingly being involved in the process of innovation. They are being incentivized to collect more and more data so that algorithms become more efficient and drive higher returns for their clients.

Regulation Remains a Challenge

In an increasingly digitized environment, the regulation of these newly evolved paradigms is becoming a challenge. Cybersecurity remains one of the biggest concerns with so much sensitive data being collected. Regulators and Wealth management firms need to constantly engage with each other to develop robust security best practices and data privacy policies to protect the customer.

Manipulation is a New Threat

Like every other evolving technology, AI is a double-edged sword. In the wrong hands, AI could be used to wreak havoc on the markets. Using bots to manipulate trading trends, malicious elements can influence the market. They may be able to mislead investors into buying or selling a certain stock or asset. However, the silver bullet for AI is AI itself. Advanced pattern recognition using AI can be used to monitor such trends in the market and raise a red flag to regulators.

Humans Remain Indispensable

Despite the evolution of Robo advisory platforms, Investment Management Solutions, Investment Platforms, and Portfolio Management Platforms, the role of the human advisor is still crucial. While AI takes care of many of the monotonous tasks in wealth management, humans still must devise the algorithms and the logic that better these technologies. Also, despite Robo advisors evolving over time, there’s nothing like the presence of a human advisor to understand a client and put them at ease. While technology is making strides in automation, human advisors remain at the core of the wealth management industry.

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