Skip navigation

AI’s Maturing Role in Wealth Management

Panos Archondakis

Senior Director, Account Management, EPAM
Blog
  • Financial Services

There is a growing focus in the wealth management (WM) industry on applying artificial intelligence (AI) to the advisory process, but making sense of the hype requires agreeing on a few definitions.

Firstly, AI itself means many different things to different people. With machine learning and big data there is a sense that by simply plugging in data, going through some basic training processes and standing back to appreciate the results, wealth management can instantly transform into a nimble, advanced, data-driven enterprise. The truth is that AI, big data and machine learning are fundamentally sophisticated, highly scalable and enormously flexible tools that identify patterns in complex data sets.

Deciphering what these patterns mean, determining the business values and insights that can be derived from them, and how they should influence our response all require a deep understanding of the business foundation and its relation to clients, products and market conditions, and processes. In short, there needs to be a solid business concept in place to create value from the data.

Understanding the Broad Scope of AI

AI methods can be applied across several functional areas within the banking industry and provide a variety of opportunities and benefits. The methods themselves, with their underlying basis on pattern recognition, can be further categorized as follows:

  • Robotic Process Automation (RPA) – A technique that uses machine learning to identify improvements in repetitive, manual processes, especially where decision-making based on unstructured content sources is involved.
  • Segmentation & Recommendations – One of the first applications of AI in the field of eCommerce, this involves analyzing customer behaviors and preferences and grouping them into clusters. Based on each cluster’s preference to a product or some other concept, content can be personalized, interaction can be highly tailored and recommendations can be made to customers for products that they have not seen but might interest them.
  • Natural Language & Chat – A growing trend in customer service that uses AI to identify language elements and phrases. Building on traditional push-button and interactive voice response technology, these systems can be implemented through text or voice and facilitate more complex interactions with more natural language.

With these different methods in mind, we have compiled a list of potential, high-level use cases for AI in wealth management:

AI Presents a Wealth of Opportunity

Looking at the wider spread of activities in wealth management, we see a number of opportunities where these approaches can be applied, such as:

Client Service & Experience

Client on-boarding is an extremely cumbersome and manual process that could be improved in many ways. For example, implementing RPA can streamline Know Your Customer (KYC) decision-making through more interactive and intuitive information gathering, as well as making areas like client risk and suitability more predictable.

Chatbots could aid improvements in client interaction and service across all channels. Tying these interactions intelligently to the entire customer journey can significantly boost response times as well as the client’s perception of the business.

Biometric security features, such as face or voice recognition, also add value to the customer experience. This can ultimately deepen their level of trust when executing authenticated transactions, from logging in to a system, to placing an order, to initiating a payment.

Ensuring that all relevant and actionable content is personalized and tailored to the context in which it is presented, the client experience and engagement will be positively enhanced.

Back-Office & Operations

Repetitive by nature, operational procedures can benefit greatly from AI, whether that means replacing or assisting the human decision-maker. For example, RPA could be applied in the processing of trades or transaction breaks, on-boarding or other risk-related activities.

Prospecting & Matching

By using modern customer experience and marketing tools to analyze, segment and understand client preferences, an organization can get a far more accurate and granular breakdown of the client base, both actual and target.

Publicly available sources – including social media, news and targeted publications – can be leveraged to generate precise prospecting and acquisition plans with an improved conversion probability.

Additionally, client profiles can be compared with previous results, matching prospects to suitable advisors in a process similar to an online match-making service.

Advisory Process & Recommendations

At first glance, there would seem to be a clear opportunity in using the segmentation and recommendation approach to offer specific product opportunities to target clients. However, very strict regulatory requirements and fiduciary duty prevent full flexibility in this model.

The full-service advisory process is usually proprietary, which is a unique selling point and is often very closely guarded within such organizations. Individual product recommendations based on customer affinity, peer analysis and advisor effectiveness create a transactional environment that contradicts the desire to increase fee-based revenues.

A key part of generating any recommendation is to have feedback on what is successful, but the time horizon of determining a “good” product recommendation could be quite far into the future. The approach may be better suited with a fully automated, hands-off approach for mass market, with a variety of eligible retail products covering loans, insurance and so on.

Enhancement of existing algorithmic approaches and models for portfolio optimization and investment advice are in their infancy, with few real-world examples in active use. Given the regulatory hurdles involved and the need to demonstrate control of the advisory process, banks will be forced to balance cost, risk and potential return: What benefit to performance is feasible above current returns? The approach is possibly better suited to discretionary or institutional strategy management.

CRM & Sales

In this final category, where we consider a kind of opportunity management, we see huge opportunity to apply traditional eCommerce techniques of segmentation and recommendation within the client relationship.

Rather than using the analytic process to identify specific product recommendations, the outcomes can be used to inform advisors of client affinities, as well as recommended content and conversation topics .

By combining content, new product and non-traditional opportunities (e.g. IPO, M&A, co-investment), advisors can more easily find and prospect pre-qualified leads with a higher probability for closure.

In addition, non-financial offers, such as corporate events and other soft opportunities, can be highlighted to create general relationship management opportunities.

What the Future Holds

Introducing AI into wealth management will likely continue to be challenging, and financial organizations will often struggle to identify how it bests suits their particular circumstances. Ultimately, the technology will be used in areas where it can minimize cost, maximize legacy data value and integrate the investment as part of a wider digital strategy.

If defined and implemented correctly, AI can offer many exciting opportunities for wealth managers, but time will tell which ones are most viable  when it comes to making the biggest impact on customer experience, technical debt and, perhaps most importantly, portfolio performance. 

Hello. How Can We Help You?


Our Offices

  • Canada

    • Ottawa

      343 Preston Street,
      ON K1S 1N4, Ottawa
      Canada

      Map
    • Toronto

      5 Park Home Avenue,
      Suite 400,
      ON M2N 6L4, North York,
      Toronto
      Canada

      Map
      P: +1-416-591-4004
      F: +1-416-595-1551
  • Mexico

    • Guadalajara

      Periférico Sur #8110,
      Col. El Mante
      45609 Tlaquepaque, Jalisco
      Mexico

      Map
      P: +52-33-462-400-98
  • United States

    • Newtown, PA

      41 University Drive,
      Suite 202,
      Newtown, PA 18940
      USA

      Map
      P: +1-267-759-9000
      F: +1-267-759-8989
    • Bellevue, WA

      110 110th Ave. NE,
      Suite 310
      Bellevue, WA 98004
      USA

      Map
    • Boston, MA

      21 Drydock Avenue,
      Suite 410 W,
      Boston, MA 02210
      USA

      Map
    • Conshohocken, PA

      101 East 8th Ave,
      Suite 201,
      Conshohocken, PA 19428
      USA

      Map
      P: +1-484-382-1300
    • Los Angeles, CA

      11601 Wilshire Blvd,
      Suite 350,
      Los Angeles, CA 90025
      USA

      Map
    • Mountain View, CA

      465 Fairchild Dr,
      Building B,
      Suite 221,
      Mountain View, CA 94043
      USA

      Map
    • New York, NY

      24 West 25th Street,
      5th Floor,
      New York, NY 10010
      USA

      Map
      P: +1-267-759-9000
      F: +1-267-759-8989
    • Philadelphia, PA

      30 South 15th Street,
      9th Floor,
      Philadelphia, PA 19102
      USA

      Map
    • San Francisco, CA

      222 Kearny Street,
      Suite 308,
      San Francisco, CA 94108
      USA

      Map
    • Washington D.C.

      7901 Jones Branch Drive,
      Suite 400,
      McLean, VA 22102
      USA

      Map
  • Austria

    • Vienna

      Nottendorfer Gasse 11,
      1030 Wien
      Austria 

      Map
  • Bulgaria

    • Sofia

      69 Bulgaria Blvd.,
      Infinity Tower,
      1404 Sofia
      Bulgaria

      Map
      P: +359-700-20-273
  • Czech Republic

    • Prague

      City Tower building,
      Hvezdova 2b,
      Prague 4
      Czech Republic

       

      Map
      P: +420 22 888 28 23
  • Germany

    • Frankfurt am Main

      Franklinstrasse 56, 
      60486 Frankfurt am Main,
      Germany

      Map
      P: +49-69-31019090
  • Hungary

    • Budapest

      Corvin Offices I.
      Futó street 47-53,
      Budapest, H-1082
      Hungary

      Map
      P: +36-1-327-7400
    • Debrecen

      Bethlen Street 3-9,
      Debrecen, 4026
      Hungary

      Map
      P: +36-52-999-485 / 45050
    • Szeged

      Felső Tisza-Part 25,
      Szeged, 6723
      Hungary

      Map
      P: +36-62-808-013
      F: +36-62-550-655
  • Ireland

    • Dublin

      Alexandra House,
      The Sweepstakes,
      Ballsbridge, Dublin 4,
      D04 C7H2
      Ireland

      Map
      P: +353-(0)-1-631-9280
  • Netherlands

    • Delft

      Delftechpark 37j
      2628 XJ Delft
      Netherlands

      Map
      P: +31 20 241 6134
    • Schiphol

      The Base B
      Evert van de Beekstraat 104
      1118CN Schiphol
      Netherlands

      Map
      P: +31 20 241 6134
  • Poland

    • Gdańsk

      Al. Grunwaldzka 472E
      80-309 Gdańsk
      Poland

      Map
    • Katowice

      Chorzowska Str. 148
      40-101 Katowice
      Poland

      Map
      P: +48-12-222-02-02
    • Krakow

      Opolska Str. 114
      31-323 Kraków
      Poland

      Map
      P: +48-12-222-02-02
    • Warsaw

      Al. Jana Pawła II 23,
      Atrium International,
      00-854 Warszawa
      Poland

      Map
    • Wroclaw

      Ul. Piotra Skargi 1,
      Budynek A,
      50-082 Wrocław
      Poland

      Map
  • Spain

    • Malaga

      Avenida Imperio Argentina num. 19-21,
      2º Planta, Oficina 2E,
      29004, Malaga
      España

      Map
  • Sweden

    • Göteborg

      Lilla Nygatan 2,
      411-09 Göteborg
      Sweden

      Map
      P: +46-85-250-06-98
    • Stockholm

      Kungsgatan 50,
      111 35, Stockholm
      Sweden

      Map
      P: +46-85-250-06-98
  • Switzerland

    • Glattpark

      Boulevard Lilienthal 2,
      8152 Glattpark (Opfikon)
      Switzerland

      Map
      P: +41-43-500-21-49
  • Ukraine

    • Dnipro

      17A Volodymyra Monomaha Street,
      49000 Dnipro
      Ukraine

      Map
      P: +380-56-790-5651
    • Kharkiv

      33G 23 Serpnya Street,
      61072 Kharkiv
      Ukraine

      Map
      P: +380-57-728-06-22
    • Kyiv: Registered office

      28 Fizkultury Street,
      03150 Kyiv
      Ukraine

      Map
      P: +380-44-390-5457
      F: +380-44-390-0861
    • Kyiv: Visitors office

      14B Kudryashova Street,
      03150 Kyiv
      Ukraine

      Map
      P: +380-44-390-5457
    • Lviv

      45 O.Stepanivny Street,
      79018 Lviv
      Ukraine

      Map
      P: +380-32-242-4642
      F: +380-44-390-5458
    • Vinnytsia

      51 Ovodova Street,
      21000 Vinnytsia
      Ukraine

      Map
      P: +380-432-551-294 +380-432-551-275
      F: +380-432-551-293
  • United Kingdom

    • London

      114 Middlesex Street,
      London, E1 7HY
      United Kingdom

      Map
      P: +44-203-514-0027
    • Manchester

      Tower 12,
      18-22 Bridge Street,
      Manchester, M3 3BZ
      United Kingdom

      Map
      P: +44-203-514-0027
  • Australia

    • Sydney

      31 Highgate Cct
      Kellyville NSW 2155

      Map
      P: +61-28-310-82-72
  • China

    • Guangzhou

      Unit B01, 23/F,
      Yuexiuxinduhui Building,
      No. 236, 6th Zhongshan Road,
      Yuexiu District, Guangzhou,
      China 510180

      Map
    • 广州

      中国广州市越秀区
      中山六路236号
      越秀新都会大厦中座 23楼 B01室
      邮编510180

      地图
    • Shanghai

      Room B509, 5th Floor,
      48 Weihai Road,
      Huangpu District, Shanghai,
      China 200000

      Map
      P: +86-21-53080606
    • 上海

      上海市黄浦区
      威海路48号
      5楼B509室
      邮编200000

      地图
      P: +86-21-53080606
    • Shenzhen

      3/F, Block 5, Vision Shenzhen Business Park,
      9th Gaoxin South Road, 
      Shenzhen Hi-tech Industrial Park,
      Nanshan District, Shenzhen,
      Guangdong, China 518057

      Map
      P: +86-755-36899008
    • 深圳

      中国广东省深圳市
      南山区高新南九道
      威新软件园5号楼3楼
      邮编518057

      地图
      P: +86-755-36899008
    • Suzhou

      Building 12, Creative Industrial Park,
      328 Xinghu Street,
      Suzhou Industrial Park,
      Suzhou, China 215123

      Map
    • 苏州

      中国江苏省苏州市
      苏州工业园区星湖街328号
      创意产业园内12号楼
      邮编215123

      地图
  • Hong Kong

    • Hong Kong

      198 Wellington Street,
      17F, Central
      Hong Kong

      Map
      P: +852-5808-6018
  • India

    • Hyderabad

      10, 11 & 12th Floors,
      Salarpuria Sattva Knowledge City,
      Plot No. 2, Phase - 1,
      Survey No. 83/1,
      Raidurgam Village,
      Serilingampally Mandal,
      Hyderabad, Telangana - 500081
      India

      Map
      P: +91-40-47979900
    • Pune

      SmartWork Business Center Pvt Ltd,
      Suite 8, Level 1,
      West Wing, Nyati Unitree,
      Samrat Ashok Road,
      Yerwada, Pune - 411006,
      Maharashtra
      India

      Map
      P: +91-20-4913-6025
  • Japan

    • Tokyo

      Floor 1-10-11
      Shibadaimon Centre Building 10th
      Shibadaimon Minato-ku
      Tokyo 105-0012
      Japan

      Map
      P: +81-03-6880-9198
      F: +81-03-6880-9201
  • Singapore

    • Singapore

      5 Shenton Way
      UIC Building, #10-01,
      Singapore (068808)

      Map
      P: +65-6911-6888
  • United Arab Emirates

    • Dubai

      EPAM Systems FZ-LLC
      Dubai Branch,
      Building 16, Office 241,
      Dubai Internet City,
      PO Box 501929, Dubai
      United Arab Emirates

      Map
      P: +971-4-568-3569
  • Armenia

    • Yerevan

      15 Khorenatsi Street,
      Elite Plaza Business Center,
      0010 Yerevan
      Armenia

      Map
      P: +374-10-60-00-65
  • Belarus

    • Brest

      6A Masherov Avenue,
      224030 Brest
      Belarus

      Map
      P: +375-162-52-5268
      F: +375-162-50-9888
    • Gomel

      80 Rechitsky Avenue,
      246012 Gomel
      Belarus

      Map
      P: +375-17-389-0100, ext. 54079
      F: +375-232-70-50-31
    • Grodno

      87B Gorkogo Street,
      230005 Grodno
      Belarus

      Map
      P: +375-17-389-0100, ext. 69011
    • Minsk

      1/1 Academician Kuprevich Street,
      Suite 110,
      220141 Minsk
      Belarus

      Map
      P: +375-17-389-0100
      F: +375-17-268-6699
    • Mogilev

      19 Cosmonaut Street,
      Suite 510,
      212009 Mogilev
      Belarus

      Map
      P: +375-17-389-0100, ext. 1001
    • Vitebsk

      11-a Stroitelei Avenue,
      Suite 311,
      210032 Vitebsk
      Belarus

      Map
      P: +375-17-389-0100, ext. 54433
  • Kazakhstan

    • Astana

      8 Auezova Street,
      Office B,
      010000 Astana
      Kazakhstan

      Map
      P: +7-7172-475-970
      F: +7-7172-688-774
    • Karaganda

      58/3 Ermekova Street,
      100009 Karaganda
      Kazakhstan

      Map
      P: +7-7212-93-01-01 +7-7212-93-01-00
  • Russia

    • Moscow

      9th Radialnaya Street,
      Building 2,
      115404 Moscow
      Russia

      Map
      P: +7-495-730-6362
      F: +7-495-730-6361
    • Izhevsk

      150 V. Sivkova Street,
      426000 Izhevsk
      Russia

      Map
      P: +7-3412-27-13-37
    • Nizhny Novgorod

      30 Poltavskaya Street
      603089 Nizhny Novgorod
      Russia

      Map
    • Ryazan

      16 Gogolya Street,
      390035 Ryazan
      Russia

      Map
      P: +7-4912-55-99-10
    • Saint Petersburg

      22/2 Zastavskaya Street,
      MegaPark,
      196084 Saint Petersburg
      Russia

      Map
      P: +7-812-611-1094
      F: +7-812-611-1094
    • Samara

      21 Michurina Street,
      443110 Samara
      Russia

      Map
      P: +7-846-200-0970
    • Saratov

      37 Tankistov Street,
      410019 Saratov
      Russia

      Map
      P: +7-8452-692-981
    • Sergiev Posad

      7 Akademika Silina Street,
      141313 Sergiev Posad
      Russia

      Map
      P: +7-496-547-11-39
      F: +7-496-547-11-39
    • Togliatti

      31E Yubileynaya Street,
      445037 Togliatti
      Russia

      Map
      P: +7-495-730-6360, ext. 47650
    • Tver

      8 Kolodkina Street,
      170002 Tver
      Russia

      Map
      P: +7-4822-630-070 +7-4822-630-071 +7-4822-630-072
      F: +7-4822-630-073