As an industry that often combines the intricacies of building strong human relationships with the analytical power of emerging technologies, wealth management can massively benefit from the widespread use of Artificial Intelligence (AI). Recent research by Accenture showed that 84% of wealth managers believe AI will transform their industry in the next 5 years. While adapting to new technology, wealth managers face operational, regulatory, and technical challenges. As a result, some in the sector are hesitant to shift to a completely new framework for gaining insights for their customers.
Investor behavior has changed and wealth managers must adapt to survive
A survey by Broadridge revealed that a whopping 87% of wealth managers say that the nature of customer communication has evolved and 77% of them had lost clients because they did not adopt the right technology quickly enough. While most wealth managers rely heavily on building personal relationships with their clients, Millennial and Gen Z investors demand the existence of digital touch-points. The pandemic has only accelerated this trend.
Unforeseen challenges such as the COVID-19 pandemic can cause investors to change their behavior and wealth managers must analyze trends and adapt to changes preemptively. During the pandemic, investors displayed a reduced appetite for risk and increased instances of herd behavior, for example. Wealth managers must learn to adapt to these trends and satisfy the needs of an increasingly tech-savvy client base. Here are 3 ways you can use intelligent software to keep your business on the cutting edge.
3 ways intelligent software can supercharge the wealth management sector
1. Improve client retention through personalized engagement
Client demographics are changing and Millennials form a larger proportion of investors than ever before. This can be concerning for some wealth managers as Millennials are almost 30% more likely to switch wealth managers and do not seem to have the loyalty of their older counterparts. Being able to predict when a client is likely to leave can allow wealth managers to establish stronger relationships or address the concerns of the client early.
With Fligoo’s predictive analytics software, wealth managers can predict with over 90% accuracy when a client intends to sever the relationship and can adapt accordingly. While predictive software can show when a client wishes to leave, the true potential of AI is in building stronger relationships with clients by providing them with highly personalized insights that can’t be provided by competitors lacking advanced technologies.
2. Aggregate and analyze data from multiple sources
Wealth managers amass large amounts of data that often sit in different data warehouses not being used. Scaling the collection and analysis of this data can be a challenge for many wealth managers, especially with the use of AI. Research by Accenture shows that approximately 3 in 4 executives face challenges in scaling AI infrastructure. This becomes an even greater challenge when considering that 75% of finance executives say it’s difficult to hire and retain data scientists. Utilizing AI-powered data analytics, wealth managers can combine proprietary data collected by legacy systems with data from external sources.
3. Use AI to massively improve lead conversion and sell more
Technologies such as social media and the internet have allowed wealth managers to reach larger audiences. However, the ability to reach large groups of investors does not translate to selling to a larger group of investors. A recent study revealed that only 0.07% of visitors to a wealth manager’s website actually proceeded to meet with an advisor. This spray-and-pray approach yields very little profits and wastes a significant amount of time for wealth managers. With software-based solutions, wealth managers can analyze large amounts of data and identify clients who are more likely to be converted at the time of contact.
Harnessing AI to become a better wealth manager
The benefits of using AI to reach, serve, and convert customers are becoming increasingly clear. The pandemic forced companies to innovate and find new ways to serve the end customer and now is the perfect time to make the shift. In a recent statement to the media, Scott Reddel, head of Accenture’s wealth management practice in North America, shared that many wealth managers still “appear to underestimate the long-term value of AI, coupled with data and analytics, to reinvent the client experience and empower advisors to have more personalized client conversations and sell the right products at the right moments in their clients’ lives.” In a field as competitive as wealth management, the first-mover advantage could be crucial in establishing a stable and satisfied client base.
If you would like to implement intelligent software to improve operational efficiency, convert prospects, and retain customers, contact us. We’ll connect you with our team to help leverage AI for your business.
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