In 2019, IDC reported that the banking industry will have the second largest AI spend globally after retail, “with $5.6 billion going toward AI-enabled solutions including automated threat intelligence & prevention systems and fraud analysis & investigation systems.”
The emergence of artificial intelligence (AI) represents one of the biggest disruptions that the business and financial services world has seen. The technology which helps to augment human intelligence has arrived across all industries, and the financial services industry is no exception. Using smart algorithms is not new to the sector; for example, it is established in credit scoring and data-driven decision making is used in trading firms. However, the recent explosion of available data across various channels has fundamentally changed the way wealth management and banking will be implemented in future.
New technologies such as predictive and advanced analytics, machine learning and AI are influencing almost every part of the financial services industry. Wealth managers will need to follow current trends in the market and move towards personalization by offering clients a service that is specifically tailored to their preferences.
AI is key for personalization, providing smart individualized products and services. It helps increase revenues, but also achieve back-office efficiencies. The use of AI techniques has already enabled a more client-centric approach for fintechs that have managed to design versatile, data-centric, business models, targeting the profitable business lines of traditional banking.
Increased competition in the financial landscape has severely reduced client loyalty, and the pressure on traditional banking providers to work on reducing the attrition of profitable client business is building up.
Every opportunity to interact and tailor a product offering must count. A lack of insight about new prospects is becoming a critical concern. To compete with new market entrants, banks and wealth managers will be required to enhance their analytics capabilities and set up the necessary infrastructure to process all their data. Traditionally this data is stored in siloed systems and used within specific business sectors and jurisdictions. But while obtaining a holistic view of their clients and developing the ability to integrate and combine many types of data is essential, realization of such a view from siloed systems poses a significant challenge.
When done properly, however, data integration can lead to increased efficiencies, business growth, cost reduction and risk reduction.
Please join us at the European Finance Summit at the roundtable discussion about “The Future of Wealth management” at 14:45 to gain expert insights and deeper visibility into the wealth management trends and forecasts.
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Communicated by Avaloq
Publié le 27 février 2020