The term "artificial intelligence" (AI) refers to the ability of a machine to learn, think, and solve problems in human-like ways. In many ways, AI can surpass human performance, and it is being implemented nowadays in many different areas of human achievement. Virtual assistants like Alexa and Siri employ AI to understand human speech and respond to questions and requests. Smart home systems like lighting and temperature control use AI to sense ambient light and human activity and adjust accordingly. AI has also made in-roads into business and industry, and some of its most promising applications are in the field of wealth management returns.
One of the most useful applications of AI in the financial services industry is fraud detection. Fraud is a serious problem, costing $190 billion per year to merchants, banks, and consumers. Through AI, however, computers are increasingly able to detect signs of fraud and lapses in security based on a combination of human input and unsupervised machine learning. This technology allows investors and advisors to place a higher level of trust in financial services that increase their security through AI.
Understanding Clients' Needs
Another way that AI can benefit an Investment Advisor is by analyzing a client's interactions with the financial planning business and providing more insight into his or her needs and interests. When a client reads an article on the advisor's website or responds to an email, for example, data can be collected that will help the advisor improve the client's experience.
Providing Micro Advice
Financial planners who work with clients at all income levels can make use of AI to provide highly specific and timely advice. For example, an AI program can search for ways that clients can save money by refinancing a loan, for example, or shifting money into a higher interest account. With sufficient data, AI software can even recommend small changes in habits that will save money that lower income clients could be investing.
Making Better Predictions
The most important benefit of AI in the wealth management industry is better market predictions. AI software can analyze client's individual preferences and risk tolerance and then prompt the advisor to make specific recommendations. There are also AI systems manager that manage funds automatically, which allows the advisor to spend more time working with clients one-on-one.
Without a doubt, AI is changing the wealth management industry for the better, enhancing clients' experiences and allowing advisors to provide better services. Check out this link to learn how one investment advisory firm is using AI to beat market performance with less volatility.