In
recent years, technology has progressed tremendously, giving way to innovative
solutions that have radically transformed the way several sectors function. The
wealth management industry is the latest in a long lineup of
sectors that have adapted to and evolved with futuristic technological
solutions. The days when wealth managers and financial advisors spent hours
poring over spreadsheets and formulas to perform calculations and analysis may
just be behind us for good. Artificial Intelligence (AI) has now made these
conventional methods of wealth
management nearly entirely redundant.
Thanks
to this positive development in the wealth
management sector, the entire
financial landscape now shows promise of simpler solutions to complex fiscal
problems. As an investor, you now have access to an environment that allows you
to leverage the latest technologies to manage your wealth much more
effectively. Read on to find out more about how wealth management has
evolved with technology.
Process automation and digital
identification
This is
one of the major ways in which wealth
management has evolved with the
introduction of new-age technological solutions. Earlier, wealth management depended
greatly on manual client onboarding processes that were not only
time-consuming, but also increased the volume of paperwork for both the wealth
manager and the customer.
Now,
the introduction of digital identification methods such as paperless Aadhaar
e-KYC has allowed the practice of wealth
management to evolve from dependence
on manual intervention to entirely automated operations. In addition to this,
the wealth management industry has also intelligently leveraged the
automation of processes using Artificial Intelligence to onboard clients.
Thanks to this excellent use of technology, the entire process of client
introduction and management has now become effortless. In fact, the entire
process now only takes around a couple of hours as opposed to several days,
which was the case with conventional methods.
Automated investment and portfolio
advisory services
The
integration of technology into wealth
management goes deeper than client
onboarding alone. Wealth management experts are increasingly employing
Artificial Intelligence to help advise and manage the investments of their
clients. Automation of these core services makes it possible for the wealth management industry to provide clients with a customized
service experience that’s driven by AI.
Since
all the back-end processes involved in investment and portfolio advisory and
management are taken care of by AI, the results that you get are highly
objective and unbiased. It also brings greater levels of discipline into the
process of wealth creation and management, enabling you to enjoy higher returns
without being weighed down by human bias. The use of technology has resulted in
rapid evolution of wealth management, since everything from suggesting the
right stocks to tracking and monitoring your investment portfolio has been
improved by automation.
Predictive analysis using algorithms
Before
technology overhauled the wealth
management industry, portfolio advisors and
wealth managers had to manually track the performance of equity stocks to
predict their movements. This included sifting through tons of historical price
data, charting of current price movements, and using multiple formulas for calculating
and assessing technical indicators.
However,
recent developments in technology have changed the way experts help clients
manage their wealth. In the current scenario, wealth management
utilizes programmed algorithms and specialized tools to help predict the price
movement of stocks. Artificial Intelligence has significantly increased the
accuracy of price predictions and enhanced the ability to easily recognize
entry and exit points. Wealth managers are also increasingly utilizing
algorithmic predictive analysis to identify the financial and non-financial
assets that can help you achieve your financial and personal life goals.
Back-testing of strategies
This is
another great example of how wealth
management has evolved to utilize
technology to its advantage. Previously, even though wealth managers and
advisory experts were capable of manually devising wealth creation strategies,
it was not possible to test these strategies in the real world. Therefore, the
impact of such strategies couldn’t be fully analyzed or predicted until they
were actually implemented. This effectively made many solutions either a hit or
a miss, often putting clients’ investments at risk.
With
the evolution of wealth management, financial and wealth creation
strategies can now be tested thoroughly under current market conditions and
environments. This ability to back-test financial plans and strategies has made
it possible to increase the accuracy of the decisions taken by wealth managers,
while simultaneously reducing the risk factor.
Use of AI in customer service
Without
technological support, wealth management service providers may find it
overwhelming to attend to the requirements of their clients round the clock.
This can ultimately lead to draining of resources, thereby affecting the
quality of service provided to customers. Here’s where Artificial Intelligence
and machine learning, two of the world’s most cutting-edge technologies, have
helped bring about the evolution of wealth
management.
An
increasing number of service providers are now providing chatbots powered by
Artificial Intelligence to help handle customers’ queries. AI helps reduce the
strain on the experts in the wealth
management industry by directing only important
and high-priority queries and demands over to the respective personnel. With
machine learning, the AI can even capture and learn from the customer
interaction over time.
Conclusion
These recent developments go on to show how rapidly wealth management has progressed by embracing new-age technological solutions. You can also take advantage of these developments by subscribing to the wealth management services offered by Tata Capital. With the winning combination of expert assistance and innovative solutions, you can harness your wealth to achieve your financial goals in record time.
14 April 2020
5 mins read
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