Business Transformation | 01.10.24

Advisors Aiming To Tap Into AI Boom in ‘24

by: Rich Blake

Over the past decade, consumers of myriad products and services, across the board, generally have come to expect a swipe, click, no-fuss, seamless digital "experience." 

Few client-facing industries have chased this haughty deliverable — often with mixed results — more vigorously than the realm of wealth management, including banks, credit unions and an array of financial technology collaborators.

Meanwhile, the past 12 months or so has ushered in an explosion of generative AI possibilities as embodied by ChatGPT, a free-to-use, humanlike “chatbot” system created by OpenAI with backing from

Microsoft. The program is conversant in every subject known to humankind — and probably could have stitched together a version of the following article in the blink of an eye (only most likely without the kind of stylistic flourish that BISA Portfolio readers have come to expect). 

Suffice to say ChatGPT ignited an AI boom, one that’s still in its early innings. Let’s explore the ramifications for the bank advisory channel.

AI use on the to-do list in ‘24

Looking ahead to the next 12 months, heads of advisory units likely will feel pressure to get their AI game into gear if only because the upside is widely seen as that consequential.

"Banks can use emerging AI capabilities to provide richer and more targeted advisory services," Deloitte said in a recent report on the banking sector.

Nearly half (45%) of business and technology professionals in wealth management plan to adopt generative AI technology over the next 12 months, per research conducted by a senior analyst at Forrester, a consulting firm, and recently cited by ThinkAdvisor. 

By way of example, JPMorgan Chase is reportedly developing chatbot software capable of recommending investment products. “Other wire houses, broker-dealers and large RIAs are similarly looking at how the technology can be deployed,” ThinkAdvisor said. 

According to Capgemini’s 2023 World Wealth Report, only roughly one-half of high-net-worth individuals are satisfied with their wealth manager’s capabilities.

And more than one-third of their survey respondents are considering changing firms in the coming year, Capgemini said.

"The way affluent clients communicate and purchase has increased the competition and makes it harder to earn their unequivocal trust," Capgemini said.

AI and the pursuit of the ‘seamless CX’

Consumers of financial services have come to expect "connected experiences," Capgemeni said.

That can mean an array of services that work across channels and providers, fueling the push toward seamless, mobile experiences, which conceivably could involve a phone, multiple financial accounts, credit cards, apps and an array of retail websites, possibly with a wealth manager's website/apps woven into the mix.

"This omnichannel experience requires the right foundations with augmented capabilities," Capgemeni explained.

The firm emphasized how AI is fast becoming the cornerstone of how the ideal customer experience is facilitated, allowing for the integration of products and services alongside behavior-based analytics, driving a sense of added-value from the client perspective (or, alternatively, spooking them).

In the wealth space, AI has been in use for several years in areas such as compliance and data analytics. "Advancements in AI that had been incremental, are now being introduced at lightning speed," Digital Wealth News said.

Tapping the dating app playbook

As industry lines blur, Deloitte explained, customer expectations become more influenced by experiences elsewhere, which is why customers are increasingly expecting banks to replicate them. 

"Some are also becoming more comfortable having their needs met by non-financial institutions," Deloitte said.

Bank wealth practice leaders can learn from customer interactions with entities outside of banking — and consider new opportunities to serve them in a more unique or holistic way, Deloitte said. 

The consultant cited Northwestern Mutual, an advisor, as an example. 

Northwestern Mutual took a page out of a dating app playbook to design a matchmaking algorithm for pairing customers with the most suitable financial advisors.

Advisors are being encouraged to invest in AI (e.g. advanced modeling tools) that can do things such as “parse through transaction data and deliver predictive insights at multiple customer touchpoints,” Deloitte said. 

AI can streamline and automate tasks that previously required manual data gathering, said Darren Connor, Chief Operating Officer, PensionPro, speaking to Digital Wealth News.

As an example, Connor pointed to acquiring, collating and delivering quarterly statements to pension plan sponsors. This task is now automated with near perfect accuracy. 

In addition, Connor told Digital Wealth News, AI-enabled CRM systems can deliver “a more personalized client experience by providing relevant data almost instantaneously.” 

Connor said he believes the industry will continue to discover ways AI can save time and reduce human error.

But let’s not get ahead of ourselves

Despite the hype surrounding AI, the systems likely won’t be ready to deliver objective advice in 2024, according to Vijay Raghavan, a senior analyst at Forrester, and who is focused on private banking and asset management, per ThinkAdvisor.

Industry members caution about overuse of AI or the notion of financial advisors putting their practices on autopilot. Such a shift in mindset is not in the best interest of clients.

“If AI is used as a tool to automate more manual aspects of the business, providing capacity and scalability to an advisor’s businesses, it will likely result in significant growth for those applying these tools,” said Brian Bunker, Senior Director at Stratos Wealth Partners, speaking to Digital Wealth News.