The Next – Generation Wealth Manager Takes the AI Train

The new generation of investors is showing no signs of being any less demanding than the new generation of bank customers. They have all come to expect – as routine – no less than the full ‘Amazon Experience’ – fast, efficient and superb customer-service.

Temenos – Company

This new generation of forceful, educated, consumers have been dubbed ‘Re-wired Investors’ and are flourishing in Europe. In ‘The Next-Generation Wealth Manager, a global report prepared jointly by Temenos and Forbes, one key conclusion is that ’we discovered that almost half of wealth managers feel challenged in matching the speed with which mass-affluent investors demand service’. How is this being dealt with in Europe?

Wealth managers are increasingly struggling to maintain their margin. That is why they have changed their attitude to wealth management in general and have been extending their offering to the lower end of the wealth range. But low-interest rates do not allow them to earn money since mass affluent customers require the same level of service as do high net worth individuals. Wealth managers are struggling because they were usure whether this was a retail-like or high net worth individual market. In truth, the market is between these sectors and needs to be seen as distinct; with elements of investment advice ad elements of customer engagement automation. The problem is that many wealth managers don’t have sufficient support or the proper platforms to come to the aid of the mass affluents.

Meeting the service-level expectations of the mass affluent is seen as the most important challenge in outreach according to our report. Up to 52% of European wealth managers quoted in the report see the mass affluent segment as highly important to their practice while only 29% saw the segment as important three years ago. This is against 6 out of 10 wealth managers, on a global level, seeing the mass affluent as being highly relevant to their practices. About 37% see specialised products and regular communication as the leading pathway to successfully acquiring their business. On a global level, wealth managers saw strong technology overall and Artificial Intelligence (AI) particularly as key steps to further growth.

Automation in this sector used to be focused on back-office and settlement activities. More and more, customer goal planning and advisor interactions are also being assisted and enhanced by automation and AI. Increased personalisation of products will be critical. In the mass affluent sector clients have very specific demands and very specific ways of interacting with banks. So for me, the personalised service is where AI can add real value. Personalised services are a lot more than products, it involves products but it is centred around product relationships with the human touch.

I think we’ve only seen the start of this process of personalisation. The affluent sector will become more and more demanding. And wealth managers, using Artificial Intelligence (AI) as it develops and learns, will be able to offer more and more personalised services at a level we cannot imagine today.

Temenos Wealth provides an integrated portfolio management and securities trading platform for any size of bank, wealth manager or private bankers. It is pre-integrated into Temenos Infinity to provide a seamless front-to-back wealth solution which applies across multiple entities and geographies across all customer markets, from mass affluent to ultra-high net worth (U/HNW) individuals.

This solution is provided via multiple innovative channels, consistently and in real-time, on-premise or on-cloud.

These more personalised services will come to the mass affluent market with a delay of only a couple of years. I think that wealth managers need to jump on the train now and start exploiting the possibilities of AI. Because it will continue. The catch up will never happen if they are not on the train.

Temenos – Company