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5 Steps to Applying New Tech in Wealth Management

Sure, we once heard that the technology of today is pushing businesses towards the future. But let’s keep in mind: the tech development is accelerating, and shows no signs of slowing down. Hundreds of success cases later, our companies still require massive improvements. To stay competitive in any market, we constantly need to automate.

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In wealth management, there are many areas to upgrade, tech-wise. When introducing a significant change in a company, though, we need to remember: the implementation of new technology is like creating the perfect puzzle piece – good when it’s adequate on its own, but even better when it fits into the whole picture. In other words, make sure the improvement is compatible with your business. The great news is, the implementation process can be compressed into 5 steps, and you can learn about them right here.

STEP 1 – Get friendly with AI

Make the unexplored potential of AI work in your favour.

The machine can predict and analyze problems in ways unimaginable to the human brain. We might not understand it completely, but we can use it to our advantage, e.g. when wondering about our company’s products. If you’re having trouble answering questions like “In which asset class to invest in?”, or, “Is this product good for these market conditions?”, feed the relevant data to AI and, at least partly, your doubts will be cleared.

There are dozens of reports on AI technology in finance – you’ve probably seen many. But, it is vital to actually harness all this info and put it into practice. To begin with, define the problems in your institution. Some of them can probably be solved with complex data analysis. If that is the case, get friendly with AI.

STEP 2 – Build yourself an algorithm

Good things need some effort.

The scope in which AI operates is extremely wide, which means that the machine needs guidance. Here is where things get tricky. In order to get the best results, you need a custom algorithm, one that is tailored to your institution’s exact needs.

The entire process of building an algorithm should revolve around your company’s products and data. There are a bunch of decisions to be made here, which might prove to be rather challenging. This step requires hiring a team of professionals who will help along the way.

STEP 3 – Don’t hesitate to use it

The resulting capabilities may exceed your expectations.

Once you’ve designed the customized algorithm, use it as intended. AI will be able to connect the dots surprisingly accurately. However, take two things into consideration:

1. Trust it – at first it’s quite hard to trust the results of your algorithm, because usually, results is the only thing you get. Algorithm’s explainability may be there, but it’s not as detailed as you would expect. Using the algorithm means trusting it – even when big money is at stake.

2. Understand it. Understanding your algorithm means analyzing the results from various angles and use-cases. By the way - the more time you spend on the analysis, the easier it will be to rely on the outcome.

STEP 4 – Help your clients ASAP

After step 3, this isn’t a big challenge. Or is it? In the world of wealth management, it is crucial to present an offer in a clear and precise way. As soon as you have your proven tool, use it to help your clients.

The application may vary, depending on the type of problem you are trying to solve. But one thing is for sure: your clients don’t care who solves the problem, as long as it’s gone.

What do I mean? Phrases like “AI” or “machine learning” may bring you good marketing buzz, but at the end of the day, what you need are happy clients. Therefore, apply the new technology with care and present its benefits in a simple way.

STEP 5 – Fit your tool into the existing process

What’s the cherry on top?

Since you have a working solution, you can now include it into the already existing wealth management process. Make it seamless so that it brings more order than chaos.

By the way, don’t forget about your employees’ workflows. Maybe they could benefit from new technology as well? Surprisingly often, you can help your RMs and advisors with the same tool. Overall, they are your “first customers”, aren’t they?

Institutions and their situations may vary, but the 5 steps presented above are largely universal. The speed at which companies implement new technologies might be intimidating, but take your time with each stage. Don’t forget that the main factor that counts is quality, because the technology that you introduce now will serve you for a long time – even if it needs some upgrades in the future.

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