Bengaluru, October 28
Wealth management firms are expected to more than double AI budgets, as per a survey carried out by IT services major Wipro.
Wipro on Monday unveiled insights from its report, "AI in Wealth Management: Navigating an Evolving DataDriven Landscape".
The report, based on a survey conducted among 100 executives in the US, examined how artificial intelligence (AI) is changing the wealth management landscape.
According to the report, the wealth management landscape is experiencing a profound metamorphosis, as AI-driven innovation promises to deliver higher levels of personalization and deeper customer and market insights.
Wealth management firms are advisors that use financial services to address the needs of clients.
In line with that promise, the survey points to a significant future uptick in AI investments, with IT budget allocations for AI expected to more than double--from 16 to 37 per cent--within the next 3-5 years.
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 a significant competitive advantage because of AI adoption. A whopping 65 per cent of executives expect significant AI-driven changes in client relationship management over the next 1-2 years.
Overall, more than three quarters (77 per cent) of surveyed firms 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).
"These 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 Limited.
"This 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," Talapatra added.