Temenos: How AI is Creating a Personalized Investing Experience
To understand how AI is playing out on the ground and where the technology is leading, Temenos and Forbes surveyed 310 wealth managers and high-net-worth individual investors.
As artificial intelligence (AI) technologies increasingly find their way into the hitherto traditional world of wealth management, a new balancing act has emerged that will define the future of the industry: an advisory service that blends man and machine to give a better service and improved results for increasingly tech-savvy high-net-worth individuals (HNWI) and newly affluent clients.
As the investor Ed Gogel notes: «Clients are going to demand AI because they’re already saying: ‹If my car can drive itself, why can’t my portfolio manage itself?› When you have a very good wealth manager, the returns that you can see are amazing if it’s actively managed with an AI strategy.»
APAC Leading the Way
To better understand how AI is playing out on the ground, Swiss software provider Temenos and «Forbes Insights» surveyed 310 wealth managers and high-net-worth individual investors across the globe about their acceptance and use of AI in wealth management. The clear message from the study shows that with the growing deployment of AI solutions for wealthy clients a new type of wealth manager is emerging, with APAC leading the way.
Just two years ago, the 2016 survey showed palpable hesitation among wealth managers – only a quarter surveyed viewed the digitization of wealth management services as essential. Today, that percentage has jumped to 52 per cent on a global level, a major leap, and executives resolutely see digital technologies as essential to the successful delivery of enhanced client experiences.
Client Experience Enhanced
Wealth Managers in APAC appear to be the most open to digitization from amongst all the regions. A persuasive 70 per cent believe that digitization is essential to them to do their job and help them enhance their client experience (see figure below)
- Digitization: 70 percent of wealth managers in Asia-Pacific say digitization is essential, versus 63 percent in Europe. This compares with a global average of 52 percent.
- Understanding: 80 percent of Asia-Pacific wealth managers are testing or deploying the use of AI in their companies, followed by 67 percent of those in Europe, 50 percent in North America and 44 percent in Latin America.
- Approach: European and North American wealth managers are the most likely to consider AI a «game changer» (41 percent and 30 percent, respectively), deploying the use of AI in their companies, followed by 67 percent of those in Europe, 50 percent in North America and 44 percent in Latin America.
- Engagement: North American companies are less likely to be engaged in AI initiatives (50 percent) and those in Latin America are the least likely to be taking steps in that direction (56 percent). Asia-Pacific wealth managers are more likely to see AI as an enabler to help their firms deliver better client experience than as a game changer (71 percent vs. 24 percent).
Emerging Robo-Advisors
Two years ago, the emergence of robo-advisors, which automate asset allocation and portfolio management, was a radically new technology in wealth management.
Today, almost 87 percent of wealth managers surveyed in the APAC region view robo-advisors positively – and they’re acting accordingly.
How AI is Affecting the Rich
Wealthy clients are becoming more sophisticated in their use of technology, a secular trend that will only gather steam as millennials and younger generations age into the bedrock segment of the business with 75 of High-Net-Worth Individuals (see figure below) positive about the use of AI and 67 percent of them supportive of their wealth manager adopting some level of AI immediately.
Given the inevitability of an integrated AI experience driving better service and results, any wealth manager that ignores or delays testing and deployment of the technology risks falling behind. That virtually every executive in the survey sees AI as an essential tool in their practice is more than a telling indication of where the industry lies right now — it’s notice to take action.
- Read the full Temenos/Forbes Insights report «AI and the Modern Wealth Manager».
