While financial firms are busy deploying technology to enhance their business models, the integration of AI into wealth management will trigger a fundamental shift, for which the industry must prepare.
In the dynamic business of financial services, where every decision can make or break fortunes, the convergence of cutting-edge technologies is reshaping the landscape of wealth management.
Firms including JP Morgan Wealth Management and Stevens Investment Group have already embraced AI-driven model generation, leveraging tools like the Vision Pro platform to uncover hidden correlations, gaining a competitive edge in trading.
Similarly, industry giants such as Goldman Sachs and BlackRock are leading the charge in adopting virtual reality (VR) and augmented reality (AR) to enhance trading capabilities. By creating customisable virtual environments, these firms empower their wealth managers to monitor market movements in real time, regardless of their physical location.
So it’s worth having a closer look at the challenges around these creative innovations unfolding in wealth management, where the pursuit of profitability drives exploration of new frontiers.
Essentially, wealth managers face a dual challenge — identifying positions that could offer a competitive edge in trading, and monitoring patterns to support timely buy/sell decisions. As the saying goes — “money is made in the dark” — emphasising the importance of uncovering hidden insights in a sea of data.
Painting patterns
Wealth managers must develop hypotheses and wade through reams of data, looking for patterns and insights to support decisions. Soon, AI will not only help develop winning hypotheses, but will conjure graphs, charts and other visual aids, enabling them to uncover correlations swiftly and effectively.
Moreover, AI agents serve as tireless researchers, kick-starting investigations and providing real-time updates, freeing wealth managers to select from a wide array of potential hypotheses.
An example may be as follows: “AI agent, show me every commodity that has risen and fallen predictably along with the value of the South African currency over the last six months”.
Or it can allow investors to go much deeper into a single commodity: “AI agent, based on all available sources, give me the relative market share for athletic shoes in Mexico and Colombia, as well as your best guesses as to how the market share among those top brands might change in the coming two years.”
Managing eight or 10 screens will no longer be necessary — or remotely desirable — when VR is more commonplace. Tomorrow's wealth managers will wield the power to transition between dozens of customised screen setups seamlessly, all easily accessible from their desk, or at their kitchen table — so long as they are wearing their headset. Each setup will likely have its own set of notifications, tailored to the manager's preferences, based on the trade they’re focused on, or the work mode they are in.
Moving with algo rhythm
Imagine a scenario where instead of manually scouring through numerous tabs and datasets, a wealth manager can leverage AI to generate hundreds of potential hypotheses tailored to their specific objectives. Through sophisticated algorithms and natural language processing capabilities, AI systems can sift through vast amounts of data to uncover hidden correlations and insights that would have been otherwise overlooked. From identifying early signals of market volatility to pinpointing emerging trends in different sectors.
While it isn’t likely that AI is going to pull the trigger on trading decisions, AI-driven alerts and notifications would ensure wealth managers are instantly notified of critical developments, allowing for swift and decisive action.
The integration of AI into wealth management represents more than just a technological advancement. It heralds a fundamental shift in the way financial professionals operate. As AI becomes increasingly indispensable in driving productivity and efficiency, it will be imperative for wealth managers to embrace this technology to remain competitive. The combination of AI, data analytics and immersive technologies is driving the future of wealth management, and will continue to do so. This is cultivating a new era of sophisticated decision-making, strategic agility and hyper-competitiveness in the financial industry.
Action not distraction
Contrary to popular belief, immersion in AI-augmented VR isn't just about distraction; it's about unlocking unprecedented levels of productivity.
Just as typing skills, spreadsheet skills and fluency with various software tools are essential for today’s knowledge workers (you’d be hard-pressed to find a job in finance without them), this new wave of tools is likely to become the new normal for productivity — a new required set of skills and ways of working.
VR won’t long be for the lone early adopter in the corner. It will be the way anyone in the office works if they want to be effective.
The emergence of ‘Ambitious AI’ ecosystems is reshaping the way wealth managers operate, ushering in an era where man and machine co-operate to achieve remarkable outcomes.
Daniel Faggella is founder and head of research at Emerj Artificial Intelligence Research
