Page 12 - Investment Advisor March 2022

INDUSTRY INSIGHTS

By Tim Welsh

AI Bringing the ‘SexyBack’ to the Back Office

Tech that helps the average advisor has long been promised. Well, it’s here.

he promise of sexy new tech-
nologies such as artificial
Tintelligence for the wealth man-
agement industry has been covered
extensively — so much so that we are
still wondering when the hype stops
and reality starts so that it will actually
help advisors do a better job with their
clients and their businesses.
The theory goes that by harnessing
Big Data, AI applications will provide
predictive analytics to help advisors be
more proactive at the advice and service
levels. For example, an AI bot can moni-
tor the activity of a client’s usage of a
client portal to detect any patterns that
would indicate they are at risk of leav-
ing, such as logins at weird hours of the
night, frequent checking of performance
reports, subsequent money movements
and other actions.
By comparing this activity with that This all sounds cool and sexy in the- compliance and administrative work-
of other clients who have left, the AI bot ory, and as a result has captured the flows — all of which are essential to
can identify a list of potential defectors imagination of C-suite executives, ana- improving service in a highly competi-
and send an alert to the advisor to check lysts and technologists industry-wide. tive service profession.
in with the client and see if there’s any- The reality, however, is that this type of This is critical because while back-
thing they can do to hopefully alleviate AI works only when it can harvest mas- office employees typically do not interact
the situation, save the account and keep sive amounts of data from millions of with clients directly, 60% of client dis-
the client. accounts, making it still out of reach to satisfaction originates from back-office
Other much-hyped applications that the average advisory firm that is serving service interactions and not necessarily
AI can deliver are through the mining of just a few hundred households. from their advisor. Because workflows
Big Brother databases to anticipate client in wealth management operations are
life changes such as sales of businesses, BUT WAIT … repetitive, data-based and labor-inten-
marriages, divorces, deaths, births of The good news, however, is that AI sive, the back-office is a great candidate
children, etc., to predict future financial and its corollary technologies, such as for AI and its cousins RPA, ML and NLP
planning and investing needs. Through machine learning (ML), natural lan- to drive workflow automation.
this type of application, advisors will guage processing (NLP) and robotic For example, according to CapGemini,
receive alerts from the AI bot to iden- process automation (RPA), are ready RPA in the back office can reduce 70%
tify which of their clients and prospects for prime time in wealth management of the cost of a full-time employee,
will soon need their expert planning and with much more immediate results. providing a quick and tangible ROI to
investing advice to capture the “money in These benefits, however, reside in the advisory firms.
motion” caused by the life event to gather back office of advisory firms, not neces- Some of the applications of these
incremental assets and generate new rev- sarily in the front, and can dramatically workflow automation technologies may Adobe Stock
enue, all while enhancing service levels. affect an advisory firms’ operations, seem simple, yet they can dramatical-

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