AI and Wealth Management: What Is the Real Potential of Artificial Intelligence in Wealth Management?

The finance industry has proved notoriously slow as far as embracing new technology is concerned. The main reason is that digitised solutions in general – and artificial intelligence in particular – have not been sufficiently efficient, transparent, and convenient to offer genuinely disruptive advantages. With the rise of explainable AI, however, things are about to shift radically. The relevance of AI in wealth management, for instance, is certainly becoming more discernible. Let us take a look at how artificial intelligence solutions could finally drive change in an industry which, until quite recently, has been reluctant to embrace progress.

AI in Wealth Management: Towards Higher-Quality Data

When it comes to wealth management, the importance of quality data cannot be overstated. In addition, in order to be deemed usable, the information itself needs to be analysed and interpreted in a way that makes it actionable. Figures and statistics, if they are not properly contextualised, serve little to no purpose. This is where one of the greatest leaps had to happen for AI and wealth management to become a logical pairing. By improving the transparency of AI and turning raw data into user-friendly insight, solution providers such as Dreamquark are revolutionising the industry.

Transparency and Accountability

Thanks to explainable AI, wealth managers can enjoy a more streamlined experience and get their clients on board easily. As the benefits of AI in wealth management gradually become apparent to them, they will want to see more of it. Document verification, risk profiling, and anti-money laundering checks are a good place to start. By adopting artificial intelligence to optimise these tasks, firms can be more responsive to their clients’ needs and generally more agile, thus improving customer experience. Thanks to AI, financial advisors can prioritise communication and share valuable insight with their clients, giving them more control over their finances and portfolio. Not only are these recommendations tailored to their requirements but the exact reason for each hyper-targeted prescription is spelled out.

Sounder Investment Strategies<

One of the most revolutionary uses of AI in wealth management is prescriptive and predictive analytics for investment advice. Modern consumers tend to move away from the risk-taking mindset when it comes to managing their assets. Increasingly, they want their money to help them meet their objectives, be it a happy, care-free retirement or short-term investments that generate a positive cash flow on a regular basis. When they wish to invest in risky stocks or crypto assets, they lack the personalised advice that they need to feel confident about their decisions. This is where AI can turn the tables, thanks to a strong data management process. Artificial intelligence can produce goal-oriented investment strategies based on near-real time data. 

Automation Towards Better Performance

More self-reliant customers mean more time for wealth managers to focus on higher-level investment strategies. By depending on AI for portfolio optimisation, for instance, they also provide a better service thanks to a more exhaustive evaluation of data sources. A wealth manager could never perform such demanding tasks themselves even if they had all the time in the world. Using AI in wealth management does away with the need for staff to adjust every aspect of portfolios and allows customers to enjoy uninterrupted feedback. 

Artificial intelligence is beneficial to both financial advisors and their clients. Where traditional portfolio optimisation used to require manual resources and time, AI provides a more powerful, more cost-effective alternative. By handling the heavy lifting and offering easy-to-interpret, data-backed insight, it gives finance experts the opportunity to focus on client service and to fine-tune their recommendations, thus reinforcing their customers’ confidence.

Heron Nelson

Heron is a business blogger with a focus on personal finance and wealth management. With over 7 years of experience writing about financial topics, Heron has established herself as a trusted voice in the personal finance space. She has a deep understanding of financial concepts and strategies, and is able to explain them in a relatable and actionable way for her readers.