Empowered by Technology, Wealth Managers Will Take Personalization to the Next Level


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Success for wealth managers will hinge on their ability to use emerging technologies to take personalized service and deep knowledge of their clients to the next level, according to a new report published by Temenos and Forbes Insights.

The report, titled “The Next-Generation Wealth Manager,” found that 64% of executives in wealth management said they are able to create distinct client profiles for highly personalized service, and 86% said artificial intelligence (AI) is important or highly important in delivering data analysis and personalized insights. That’s significant because nine in 10 said analytics has the same level of importance.

Taken together, the findings suggest that wealth managers are all-in on and have advanced their digitization and deployment of AI with big strides. Still, over a third are notable to deliver highly personalized service, a touchstone of the business.

“The real key here is how you put your advisor in the know, whether it’s online or mobile,” said Gailyn Johnson, chief operating officer at U.S. Bank Wealth Management. “You can make the relationship much more interactive by providing more insights and timely information.”

Turning Data Into Insights

Executives who took the survey overwhelmingly believe that wealth managers who are adept at (84%) and increase personalization of products (82%) will succeed.

But how wealth managers practice hyperpersonalization, which high-net-worth and mass affluent investors expect, will require AI and analytics.

Technologies like machine learning that can make sense of data and patterns—and the incisive analytics that can result from its use—are now essential. And AI is important to myriad aspects of the business, including:

  • Overall client experience (82%)
  • Client communication (81%)
  • Operational efficiency (82%)
  • Back-office efficiency and automation (80%)

AI also factors into the investment side: More than eight in 10 executives see AI as important in forecasting, and almost the same percentage of executives believe it plays a big role in portfolio returns.

Still, clients believe advisors have an outsize influence over returns, even if they’re aided by AI. A fifth of them give advisors all the credit—and over half (54%) say they should get almost all the credit. In essence, wealth managers will be distinguished by what they do with the and how they deepen their capabilities. Those who are successful in this regard will be rewarded with client loyalty.

“We’re using AI in a number of tools to bring our internal enterprise data together and bring insights to our customers,” said Johnson.

She points to client services such as U.S. Bank’s mobile app and an external account aggregation feature that pulls data on the full financial picture of clients into its financial planning software. That capability helps advisors know exactly what’s going on in other areas of a client’s financial life. And the data fuels the firm’s AI systems for insights.

“It’s not one big data mark, but how you connect all that data to gain insights on customers,” she said. “We want to ensure that we are providing the best services and timely insights for them.”

Inspiring New Products

The window into clients’ behavior and financial goals—and ever-nuanced segmentation–is being opened wider thanks to analytics. Almost 40% of executives say analytics enable capabilities like more proactive financial guidance and more accurate tracking of individualized results.

Eddy Tai, global head of operations and at Bank of Singapore, points to the predictive capabilities emerging from AI and data analysis. Deeper insight into profiles enables wealth managers to gain precise readings on satisfaction levels, for example, so they can accurately predict when a client plans to leave the firm. That’s one way analytics is playing a role in retention and lowering churn.

Analytics improves Know Your Customer, or KYC, in other ways: Profiles become more accurate in a real-world way. Tai describes the example of a client who presents himself as very conservative, while analytics from this person’s behavior shows an interest in more alternative investments or new markets.

“Through data analytics, you can see why a client will behave differently than he or she would on paper or based on conversations—and this enables a level of understanding we didn’t have before,” he said.

The role of AI and analytics in personalization extends into investments by opening the way to new products and services. Almost half (45%) of respondents say this use case will change the financial guidance they give clients; they also see new and more sophisticated financial products emerging (37%).

That trend is already well under way: Over the past three years, with the rise of AI and analytics in the wealth management experience, 42% of clients surveyed say they have more clarity and awareness over their investments—and almost a third report that their advisor has a better read on financial markets.

“The reality is that even little bits of insights are so valuable,” Johnson said. “How we help our clients is an ongoing evolution. Whether they’re in emerging wealth, private wealth or mass affluent, is foundational—and clients are expecting it more and more.”

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