TOPIC // Wealth Management

AI in CRM for Wealth Management: Sizzle or Steak?

I’m a consistent conference goer. I go to learn about and discuss all things wealthTech, and every year we see the bandwagon steer towards the same trends. This year especially – though certainly true of the last few years – we seem to have latched on to artificial intelligence (AI) and machine learning (ML). I see demos of some really cool technology. 

But, it’s usually just that; technology. The question begs to be asked: is there really something here? Or, is this all sizzle and no steak? What are the realistic and fruitful applications of AI in wealth management? Actually, there are some issues with that question.

The first issue is that most of us have this fantastical view of artificial intelligence being some futuristic, ultra-complex, sentient, and callous robot. No doubt, science-fiction has set us up for such a view. If we look at how our technology partners actually define it, it seems much simpler than that. According to Google: “the theory and development of computer systems able to perform tasks that normally require human intelligence.” In fact, we’ve had AI around for so long already that we no longer think of things as AI that once was. For example, optical character recognition (OCR) – software that can take a scanned document and turn it into text. According to the definition, however, that is absolutely artificial intelligence. Plenty of examples exist in CRM, like our Service Level Management for managing customer engagement and driving loyalty. So when you think about it like that, it becomes easier to see that we already have and use AI today, and then look at more potential for applications.

The second issue is that we’re asking the question a bit backwards – what are the applications of AI in wealth management VS what are the issues in wealth management and is AI the right way to solve those problems? Now the title of this blog is about AI in CRM for Wealth Management. Certainly, we’ve seen AI being used for things like portfolio management and investment techniques using computers to do technical analysis or algorithmic trading. Robo-advisors are getting smarter with this kind of technology. Who knows how they’ll react in a recession or bear market, but for now there seems to be some moderate success for AI there. But what of the client-facing aspect – can and should AI help us here?

Yes, absolutely. The first part however, has nothing to do with wealth management at all. It’s more AI for CRM generally speaking. Things like next best action for an opportunity or case, identifying potential leads or opportunities for up/cross-sell, search, suggestions for customer segmentation. These are generally great applications of AI in CRM – but that can be said for any industry. This alleviates the need for me to filter and sort data and draw conclusions, instead having the system use rules and algorithms for identifying these things from the data it has. Cool, but does this make you a better advisor or just a better salesperson and customer service agent?

Still, I think the answer is absolutely yes. However, the right way to go about this is to rephrase the question first. What do advisors do that requires intelligence that we can get AI to do for them instead? That is the right question. Believe me, advisors will talk your ear off about the things they feel that they “waste” their time on.

Let’s take a great example: at or near the top of that list are quarterly reviews with clients. There are so many steps to doing this right. First – you have to know who and when to prep for. Simple enough to maintain a list, but it takes some smarts to excel at this: managing multiple schedules, changing frequency based on customer preference or life-events (birthdays, anniversaries, etc.). Having the system tell me who to review and when is great and AI is being used for that. Then comes the actual prep – relating investment performance to the market and, more importantly, to the financial plan. The hard part is putting this into consumable language that will make sense and resonate with the client. You have to understand what kind of client they are (actively engaged in the markets, hands-off, detail-oriented, etc.), and then spend a lot of time personalizing the content. Advancements in natural language generation (NLG) within AI are making that a reality. Then, the meeting itself. So many advisors fall behind on entering notes from their reviews and most of them don’t enter very good notes. AI can transcribe and analyse tone from the conversation. And finally, for the follow-up, AI can be used to discern action items and takeaways. Looking even further into the future, you could use natural language processing (NLP) and speech to allow clients to have a preliminary review with a chatbot at any time before or after their review with the advisor.

That’s just one example – but the point is that this is REAL and it is here. More importantly, AI really can be the steak on the CRM for Wealth Management plate that advisors will truly benefit from. Does this mean we’ll eventually replace advisors? I don’t think so – to think like that is to really undervalue the benefit, intelligence, and talents of an advisor. It will mean advisors shift value propositions, and that the bottom of the pack will no longer meet the higher bar. But, AI – if used correctly – will help advisors scale their practice by relegating the intelligence required to computers so that previously time consuming and manual tasks can be automated.

Have a killer use case in wealth management that you think AI can help with? Let me know – happy to talk about how real that could be and what it will take to get there.

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