AI’s growing role in North America’s wealth management space

In North America, AI is being deployed across multiple business lines.

AI’s growing role in North America’s wealth management space

In North America, AI is being deployed across multiple business lines. Here are the top proof-of-concept use cases, currently, for AI in wealth management.

It is no longer early days for Artificial Intelligence (AI) in wealth management. Indeed, what was an area to watch a few years ago is increasingly entering the mainstream, and most private banks and wealth managers are finding different use-cases for AI in their organisations.

The use-cases are varied. AI allows firms to scale in a way that isn’t linearly related with their size, so they can do more with the same employee base.

Using AI can help drive down a company’s total cost of operation in the mid- to long-term and improve advisor productivity by deploying chatbots as self-service channels.

In North America, particularly, AI is already being deployed across multiple business lines. Here are the top proof-of-concept use cases, currently, for AI in wealth management.

Robo-advisory

A growing number of North American wealth management firms offer hybrid robo-advice platforms combining automation, AI, and human expertise.

These include BMO Bank of Montreal with SmartFolio; Charles Schwab with Intelligent Advisory; Merrill Lynch with Merrill Edge Guided Investing; and Wells Fargo Advisors with Intuitive Investor, which was developed in partnership with US FinTech SigFig.

Chatbots and beyond

Chatbots use Natural Language Processing (NLP) to answer customer queries and action transaction requests, running on digital banking channels and messaging platforms such as Facebook Messenger.

Natural Language Generation (NLG), a technology generating natural-language narratives from computational inputs, is used to assist advisors in briefing clients.

Reporting activities and AML detection

AI plays to its strengths in the middle office where human discretion is in maximum use at wealth management organisations.

Some hedge funds acting as investment providers to the wealth industry already use AI techniques where portfolio tracking, rebalancing and investment selections/trade decisions are made in an automated fashion.

Advanced analytics

AI allows firms to gain new insights into their business, beyond traditional analytics. Kamath informs that Incedo is talking to a client to understand how public media content such as blogs frequented by advisors can be used to model advisor behaviour.