The artificial intelligence (AI) budgets at wealth management companies are set to surge from 16 per cent to 37 per cent within the next 3-5 years, according to a report on Monday.However, a readiness gap in regulatory compliance and skilling of talent threatens to slow down efforts, said the report by IT major Wipro.
One key challenge for organisations is the skills gap in AI. To meet this challenge, 68 per cent of organizations say they are prioritizing training and recruitment in of employees in AI.
“The findings suggest that AI offers wealth management firms a chance to innovate, stand out, and succeed in an increasingly competitive market,” said Ritesh Talapatra, vice president and sector head for capital markets and insurance, Wipro.
The technological shift comes at a time when the industry faces several challenges, including pressures on assets under management (AUM), fluctuating revenues, increasing operational costs and rising client expectations.
In this context, AI emerges as a powerful tool to deliver customised wealth management guidance, optimised client satisfaction, and maximised financial returns, said Talapatra.
All surveyed firms indicate that they have started adopting AI in different parts of their operations. However, less than half (44 per cent) say they are using AI extensively.
“That said, these extensive users report tangible benefits, with 73 per cent experiencing significant competitive advantage because of AI adoption,” the report mentioned.
These users also lead the pack in leveraging AI to enhance client engagement, with 65 per cent expecting significant AI-driven changes in client relationship management over the next 1-2 years.
Overall, more than 77 per cent report improved decision-making with AI-driven predictive analytics and 76 per cent note overall operational efficiency improvements.
Meanwhile, risk management is one of the key areas disrupted by AI, according to more than half (53 per cent) of the firms, followed by research and analysis (45 per cent), the report said.