As reported by Avaloq, a provider of digital banking solutions and wealth management technology, most UK wealth and investment managers believe artificial intelligence (AI) will play a significant role in determining how they conduct business in the future, but clients still do not trust the technology.
More than 300 wealth managers and 3,000 investors worldwide participated in Avaloq’s study, which found that 87% of UK wealth managers think AI will play a major part in their future work and that the technology will improve the wealth management sector overall.
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Based on Avaloq’s research, AI has most ability to assist UK wealth managers with client onboarding, with 86% believing it would provide substantial gains. Other areas where UK wealth managers believe AI may make a noticeable impact include automatic summaries of client meetings (65%), automated compliance monitoring (64%), and automated regulatory checks (61%).
Nevertheless, a significant obstacle that tempers enthusiasm for AI is client trust. In Avaloq’s research, 25% of UK wealth managers think their clients could never trust AI for investing, and 27% say the same about their clients’ trust in AI for financial planning.
UK investors share this prudence, with only 7% saying they would feel comfortable depending entirely on AI for financial advice, compared to 38% who would favour a hybrid strategy where their wealth manager is assisted by AI tools. A majority of people (55%) oppose the use of AI in any way when giving investment advice.
The caution may be attributed to the historic importance of personal interaction in financial advice, which serves as a cornerstone for trust between advisers and their clients. As shown by Avaloq’s poll, robo-advisers are still underutilised, with only 6% of affluent to ultra-high net worth investors using them.
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By GlobalDataGery Zollinger, Head of Data Science & Analytics at Avaloq, stated: “UK wealth managers recognise the enormous potential for AI to support them. The potential use cases are vast, from automated processes which free up more time for managers to focus on clients and strategic decision-making to streamlined analytics and cost-effective services that expand access to advice.
“That said, there is still clearly a way to go when it comes to bridging the AI trust gap between wealth managers and their clients. For AI to be successful from a client perspective, wealth managers need to work closely with their clients to demonstrate the value AI can bring to their portfolios, while ensuring that the use and impact of the technology remain transparent and well-understood.
“AI can augment the service advisers provide to their clients, but the human element will always be vital.”
