According to the report, the wealth management landscape is experiencing a profound metamorphosis, as AI-driven innovation promises to deliver higher levels of personalization and deeper customer and market insights. In line with that promise, the survey points to a significant future uptick in AI investments, with IT budget allocations for AI expected to more than double—from 16 to 37 percent—within the next 3-5 years.
All surveyed firms indicate that they have started adopting AI in different parts of their operations. However, less than half (44 percent) say they are using AI extensively. That said, these extensive users report tangible benefits, with 73 percent experiencing significant competitive advantage because of AI adoption. These extensive users also lead the pack in leveraging AI to enhance client engagement, with 65 percent expecting significant AI-driven changes in client relationship management over the next 1-2 years.
Overall, more than three quarters (77 percent) of surveyed firms report improved decision-making with AI-driven predictive analytics and 76 percent note overall operational efficiency improvements. Meanwhile, risk management is one of the key areas disrupted by AI, according to more than half (53 percent) of the firms, followed by research and analysis (45 percent).
“These findings suggest that AI offers wealth management firms a chance to innovate, stand out, and succeed in an increasingly competitive market,” said Ritesh Talapatra, Vice President and Sector Head for Capital Markets and Insurance, Wipro Limited. “This technological shift comes at a time when the industry faces several challenges, including pressures on Assets Under Management (AUM), fluctuating revenues, increasing operational costs, and rising client expectations. In this context, AI emerges as a powerful tool to deliver customized wealth management guidance, optimized client satisfaction, and maximized financial returns. At Wipro, we are committed to bringing these solutions to our wealth management clients to fuel their future growth.”
The report also underscores the pivotal role of advisors in effectively integrating AI into financial advice to meet the diverse and evolving needs of investors. As such, one key challenge for organizations is the skills gap in AI. To meet this challenge, 68 percent of organizations say they are prioritizing training and recruitment in of employees in AI.
Further, the report shines a light on the challenges related to the regulatory environment. Almost two-thirds (62 percent) of firms identify the absence of clear regulatory guidelines as a top challenge in AI adoption. Additionally, majority of firms highlight regulatory and compliance challenges (55 percent) and biased and discriminatory outputs (54 percent) as significant barriers to AI adoption.
“AI is rapidly moving from a peripheral technology to a core component of wealth management operations,” continued Talapatra, Wipro Limited. “As firms embrace AI, regulatory scrutiny around AI has intensified significantly. Ensuring AI implementations are not only innovative but also fully compliant with the latest regulatory standards will be a growing challenge for companies. Ensuring that AI systems are explainable and trustworthy is essential for maintaining both regulatory compliance and client confidence.”
In closing, the report highlights that successful integration of AI goes beyond mere technological implementation. It recommends firms to leverage AI to fundamentally reimagine how wealth management services are delivered and experienced and to cultivate a culture that not only accepts AI technology, but actively embraces change and innovation.
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