We talk to a Canada-based provider of enterprise customer management solutions to the financial services industry. The topic is AI, and what it can do for the sector (and what the limitations might also be).
The acronym “AI” has become so familiar that almost everyone reckons they understand what it means. Artificial intelligence continues to excite a mix of fascination and fear. Will it take my job or make it more pleasant and productive?
AI is certainly a regular wealth management topic, with much talk about “robo-advisors” and using tech to remove the tedious bits of an advisor’s job. It is worth reflecting how long in the tooth AI is, however, if only to avoid hype. By some definitions, AI is more than 80 years old.
“The first computer was made in 1938 and only in the past five years has 90 per cent of the world’s data been created. It is data that is required to make AI work,” Matt Bogart, head of sales and marketing at NexJ Systems,said. Bogart is based in Toronto. “Making a utility out of all this data is only now coming to the fore.”
With wealth management, AI can be used to improve the customer experience, drive revenues and cut costs.
“People have become really familiar with being at home and making purchases online; they have been watching a lot of Netflix and bingeing on it. They’ve become more familiar with the predictive element of what is of interest to you,” Bogart said.
And, as with streaming services, with its predictive algorithms and settings, AI can hopefully deliver “mass customization” in profitable ways. That’s the hope, at least.
Large firms are spending heavily in the area. Bogart noted, for instance, that a quarter of the staff at Goldman Sachs are software developers, equating to more than 10,000 employees focused specifically on building systems for their firm.
“And they [Goldman Sachs] are not alone. Most firms have innovation centers that focus on developing applications they may deploy within the firm at a later date,” he said.
“Where I have seen the significant benefit to date is in the area of `next best action’ where an advisor is presented with a dashboard of priority ranked tasks they can choose to complete. Digital engagement is also at the forefront as advisors hyper-personalize information they deliver to their clients,” he said.