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Top Technology Trends in Wealth Management

By: Robert Kirk, VP & Head, ISG - Wealth Management at Mphasis


As we inch closer to 2018, it amazes me to think to take a look back and see many of the advances in technology within the Wealth Industry. Artificial Intelligence (AI) will exponentially transform how we do business for the better. Organizations must change how they do business and they must change quickly. Here’s how:

1. AI Correlation Matching: “Look-a-Like clients” will become a mainstay for how to gain share of wallet

Since broker dealers and firms are required to keep their customer correspondents and the data on their customers for up to seven years, there’s so much potential to use all this data to gain share of wallet.  The issue was that no one had actually been able to segment it properly, figure out all of the different types of customers, associate the right information, and then compare them – until now.

By using AI and adding in and defining additional rows of data – whether it’s customers’ age, geography, marital status, the value of their house, etc. – you’re able to start modeling out your clients, and find your best ones. AI allows you to basically create a list of top clients, products and services that they have bought and compare them to all of your other customers by matching up those data points (like a column comparison in Excel).  In doing so, you will quickly see that you can uncover multiple opportunities where your “Look-a-like clients” have not done the same.  It’s an exciting and innovative way to find previously unknown opportunities, and a computer can uncover them exponentially faster than a human.

2. Customer Service: Front office and back office data will be combined to predict customer segments, sales, service, and support needs before they occur

As broker deals and firms begin to segment their different types of customers, at the same time, computers are starting to correlate that data to anticipate a customer’s next move through machine learning. Through AI, a computer can keep track of every movement and click the customer makes online, through an advisor, or with a call center, and begin to recognize patterns.

For example, if the market looks like it will drop, firms can automatically send customers an alert since they already anticipate the types of customers that will eventually go online, check their balance, and make a phone call to customer service.

From a business perspective AI reduces both cost and time, since it also cuts down the amount of calls that roll in through customer service, since firms are being proactive and sending customers information ahead of time.

3. Unsupervised machine learning will expose multiple sets of previously unknown trends in our industry

Computers can process and analyze huge amounts of data, from disparate sources, on multiple levels, all at the same time, and with no hidden agenda.  The goal of unsupervised learning is to model out associations and clusters along with the distribution of previously unknown characteristics.  By using such techniques, firms will be able to find new hidden patterns within their existing customer data that could help them better service and support their customers.  The uncovering of this information will dramatically help them increase customer satisfaction and lower the risk of losing clients and/or advisors.

4. Compliance will become a driver of business revenues as AI will begin help them model out success

Considering the fiduciary responsibility that our industry has, we will begin to see how Compliance and regulations can help support revenue growth by better aligning the necessary data for customer life stages, where certain types of products are sold to certain types of people, with certain financial similarities, i.e. everyone already knows that initiating a conversation with a 22-year-old about debt management and not an annuity is the right thing to do.  However, AI will better help find the nuanced data that helps prove why potential opportunities may exist for certain products/services.  Inherently, this means that every firm will now have more than just the gut feel of an advisor … they will have scientific evidence to prove their .

Compliance and regulation will line up these different products and services for customers, and it will become easier for firms to model out success.

5. AI will deliver on the promise of “personalization” by contextually combining who the customer is, where they are in their life, with the specific products and services that are required – The right recommendation, with the right information, at the right time!

Once firms start realizing that everyone goes through similar sets of circumstances at different stages of our lives, and the more they’re able to model these out, the faster they’ll be able to anticipate their customer’s needs. Humans are tribal by nature, and it is this unknown pattern that will truly breakdown how products and services are delivered today.  We are on the cusp of some industry changing breakthroughs in AI; the first firms that recognize this and act quickly are bound to gain a tremendous edge, outpacing all who leave it for tomorrow.

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