Wealth management firms are set to significantly increase their AI investments, as revealed in Wipro’s recent report titled, AI in Wealth Management: Navigating an Evolving Data-Driven Landscape. The report, based on a survey of 100 executives in the U.S., indicates that wealth management firms will more than double their AI budgets, with allocations expected to rise from 16% to 37% over the next 3-5 years.
AI’s Role in Enhancing Client Relations and Competitive Edge
While all surveyed firms have adopted AI to some extent, fewer than half (44%) use it extensively. However, among those using AI at higher levels, 73% report a distinct competitive edge, and 65% foresee notable advancements in client relationship management within the next 1-2 years. More than three-quarters (77%) highlight improved decision-making via AI-powered predictive analytics, and 76% report overall operational efficiency gains. Key areas impacted by AI include risk management (53%) and research and analysis (45%).
A Response to Industry Challenges
Ritesh Talapatra, Vice President and Sector Head for Capital Markets and Insurance at Wipro, emphasized the strategic opportunity AI presents for wealth management firms to navigate industry challenges such as asset management pressures, revenue fluctuations, and rising client expectations. “AI offers wealth management firms a chance to innovate, stand out, and succeed in an increasingly competitive market,” Talapatra stated.
This rise in AI spending signals a transformative shift in the wealth management landscape, with firms aiming to leverage technology for greater personalization and insight-driven services.
