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AI in Wealth Management

By Aveek Pal Chaudhuri

Artificial Intelligence (AI) is making human works easy. AI is helping to reach zero error state in many sectors including wealth management by simulating human intelligence process in machines – mainly computers. Learning, reasoning and self correction are the processes involved in the simulation. AI applications can be found in Optical Character Recognition, Handwriting Recognition, Speech Recognition, Face Recognition, Artificial Creativity, Computer Vision, Virtual Reality, Image Processing, Photo and Video Manipulation, and Diagnosis.

In Wealth Management, Artificial Intelligence is helping Investment firms to overcome problems related to slow data processing. AI can solve equations of millions of dollars within a millisecond. However, AI tasks are not limited only to this. AI is transforming the financial advisory and wealth management industry by automating routine tasks and thereby delivering best client experience.

Some of the key applications of AI in Wealth Management are:

1. On-Boarding Clients in No Time

Yes, AI automation is fervently and intelligently speeding up the client on-boarding process. Best results are witnessed when Wealth Management professionals take small steps to achieve discrete objectives and afterwards starting to work for wide array of enterprises. Investment servicing firms are starting to automate the traditional manual on-boarding process. The processes include initial communications, document verification, anti-money laundering checks, risk profiling. Legality of the documents is also verified by AI. Thus, AI has made the documentation process hassle free. Wealth Management consulting firms have seen improvement in the productivity by using AI. In addition, AI helps in accessing client information faster.

2. AI Being Transparent and Responsible

Today, Wealth Management consulting firms and financial advisors are able to gain and hold client trust because of AI. AI enabled systems like chatbots have enhanced the products development process by taking personalized inputs from the clients in order to meet the budding needs of the clients. Moreover, transparency is maintained in advisory firms from grass root level where a perfect fee structure calculated by AI is showcased.

3. Simplifying Advisory Services

AI in finance is helping Wealth Management professionals and financial advisors to deliver optimum financial advice to the clients at lower cost. As AI has taken up the routine tasks, wealth managers are able to stay focused on higher level investment strategies. With AI being able to analyze client data for creating better packages in accordance to exact economic condition, wealth managers are able to make time for research on data for making quicker, accurate and informed decisions. This has risen up the client count.

4. Portfolio Creation

Financial advisors and wealth management companies are starting to implement AI in portfolio management. Earlier, portfolio optimization was depended on manual efforts, which was quite exhaustive as assessment of all data sources evenly took infinite time. Now, digital information algorithms are predicting every possible trend and thereby optimizing portfolios correspondingly. There is no staff involved in the process. Money management system has become smart which is tracking contextual indicators and adjusting portfolios automatically. The duration of the process is less and hence clients are getting results before the time allotted. Portfolios are managed and optimized better than before with a data centric approach, where clients need not worry about sudden changes made by managers to limit their returns.

5. Portfolio Rebalancing

Since a portfolio’s performance is subjected to a variety of market factors, the permutations and combinations are huge to be equated manually. Intervening in the process, AI equips portfolio management with tools that can generate insights to direct and advocate policies to financial advisors. Financial advisors are taking these insights to clients and rebalancing their portfolios if needed. The results also allow the financial advisors to heave their larger investment strategy and provide personalized services further.

AI is becoming a powerful tool for the Wealth Management consulting sector with personalized AI-Driven recommendations for the clients.

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