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AI technologieseNewsletter Winter 2019

AI technologies are set to transform businesses in ways we’ve not seen, since the Industrial Revolution. Unquestionably, the digital era is evolving in the Wealth Management sector with AI and robo-advisory tools becoming more widespread. 25% of 600 banking professionals surveyed by MoneyLIVE as presented in FStech, said that they used AI at a moderate extent. The growth of AI will “plug the current gap in data science skills, predicting that by 2020 more than 40% of data science tasks will be automated” according to Gartner.

In this report as well as in an earlier report by McKinsey & Company it is noted that there is still fear of AI mainly regarding jobs that could be lost. More than 84% are fearing regulatory and liability issues arising from AI. However, the World Economic Forum estimates that 133mn new roles may emerge by 2022 adapted to the new era. AI and Machine Learning errors can be overcome using the right algorithms and parameters fed into the system ranging from client onboarding checks to investment portfolio proposals. The time to deploy these technologies has come to fruition. The Wealth Management industry has always been a bit reluctant on how new technologies can be utilised (mainly concerned over the business’ and the customer’s security). However, this is changing since robo-advisory service is gaining traction with individual investors and firms embracing it, as presented in the interesting article by The National.

Proper data management and innovative spirit in business can stipulate the efficacy of implementing AI-driven strategies that would save significant time, effort and resources leading to more profitable operations.

“AI-powered value-added services are already on the way to becoming mainstream practice in an industry seeking to build new value chains. Incumbents need to step into this space if they are to compete effectively. Delivering best-in-class personalised financial and investment advice at scale would be economically impossible using human advisors but can be achieved by AI.” The report states.

According to Aite, while “wealth management is characteristically a human and emotional endeavour,” with constant changes in regulation, target markets, global uncertainty and “disruptive innovation,” AI is expected to develop over the next couple of years. AI will become easier to use and understand, particularly as more vendors get involved and bring their own innovations to the field.

Taking these findings further, imagine the savings a firm could have by utilising robo-advisory tools to segment and target particular markets that are currently either not served or underserved. To these markets a personalised and tailored service using AI technology could be offered, increasing loyalty and customer satisfaction through fast and unique UX-CX.

In other areas, robo-advisory could be used to automate the onboarding process with online checks and to support the investment officer in drawing tailored investment proposals with alerts on performance and monitoring.

Such processes could potentially save more than 50% on company’s resources that could be allocated to offer a higher-level service with more value added.

Profile Software, capitalising on almost three decades of experience in the industry, develops solutions that are scalable, flexible and forward-looking to effectively support wealth management operations. With international implementations and specialised functionality, Axia and Axia Robo Advisor successfully meet the challenges of the future.

*Trademarks are the property of the respective owner.

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