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Less Than a Third of Wealth Managers Scaling AI Across Their Businesses 

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About 4 in 5 North American wealth managers in a recent report from Accenture said they expected artificial intelligence to transform their industry in the next five years, but less than a third said they were currently scaling it across their businesses.

The report was based on an online survey conducted in October among 100 technology and strategy executives from a variety of financial services firms in the U.S. and Canada.

Seventy-two percent of respondents said they were focused either on experimenting with the technology through siloed proof of concepts or deploying it across targeted business groups. 

At the same time, 85% believed that the promise of AI in wealth management was more hype than reality.  

However, 79% of wealth managers surveyed said they were eager to adopt AI tools that deliver improved efficiencies and enhancements. 

Accenture said this comes against the backdrop of the COVID-19 pandemic, which has increased wealthy clients’ demands for highly digitized experiences. Other considerations are also pushing adoption, including ongoing fee pressure and increased competition from investment banks looking for wealth management’s more stable returns.  

According to the report, wealth managers may be underestimating the long-term value of applying AI to transform the wealth management customer experience. 

Sixty-five percent of respondents said AI can create the most long-term value in the middle office — including investment management — or operations, whereas only 35% saw long-term value in improving the client experience and engagement. 

“The findings suggest that although wealth managers are eager to embrace AI, they largely haven’t been able to move beyond experimentation toward widespread organizational application at scale,” Scott Reddel, head of Accenture’s wealth management practice in North America, said in a statement. 

“They also 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.” 

Accenture said the report’s findings align with global cross-industry research of 1,500 C-Suite executives the firm conducted last year to understand success factors for scaling AI. 

That research showed that although 84% of C-level executives did think they would achieve their business strategy without scaling AI, only 16% had moved beyond AI experimentation to broader-scale deployment. 

Promising Future

AI has the potential to reimagine wealth management in several areas, according to the report: 

  • Always-on and tailored client engagement
  • A more personalized client experience
  • Dynamic and customized product recommendations
  • Improved efficiency by relieving advisors of routine tasks
  • Automation to reduce costs in the middle and back office. 

The report further suggests that AI can unlock client insights that generate actionable leads and opportunities to help acquire new clients, improve cross-selling and manage client attrition. 

Asked how they are capturing the benefits of AI, 62% of wealth manager participants said they use the technology to attract new clients, and 61% said they do so to increase client service.  

Four in 5 wealth managers said the client experience can be transformed in the next year through AI tools that can determine changes in client sentiment and augment the client relationship management process. This will enable advisors to engage more with clients and provide a personalized experience.  

Longer term, Accenture estimated that about 30% of an advisor’s daily activities could be automated through AI. The industry sees strong potential in this use case, with 49% of respondents saying they plan to deploy AI to automate routine accounting and other support tasks for advisors. 

Survey participants were less optimistic about cost savings and revenue growth in the first year, with 70% expecting AI to create less than a 20% improvement in cost savings and 64% saying the same about revenue growth.

Still, a majority expected a 20% or more increase to both the top and bottom line in two to three years.

“Wealth managers have to embrace AI and data and analytics at scale to transform the digital wealth experience and the very nature of advice,” Michael Spellacy, a senior managing director at Accenture and global capital markets industry lead, said in the statement. 

“The next generation of wealth only engages on a technological dimension.  AI can enable financial advisors to bring better insights to clients and engage their full wealth and capabilities rather than the fragments they serve today.”