The rise of artificial intelligence (AI) is set to transform wealth management, according to a Microsoft executive, as the technology’s ability to analyze data rapidly lowers the barriers for new players to compete with traditional banks.
Martin Moeller, who leads EMEA’s AI and Generative AI for financial services at Microsoft, explained that AI’s capacity to process financial information efficiently means that just a handful of people can now manage tasks once handled by large teams in banks.
“Generative AI is poised to change the competitive dynamics of the industry,” Moeller stated in an interview with Reuters. “Much like the internet revolutionized business years ago, AI will make it significantly easier for startups to enter the market.”
For instance, since early 2024, Klarna, a Swedish payment services company, has used AI from OpenAI, a Microsoft partner, to handle tasks previously done by 700 employees.
The potential of AI is also being recognized by major asset management firms. UBS, the world’s biggest wealth manager, is among those exploring AI’s benefits. The CEO of UBS, Sergio Ermotti, recently commented that AI has the power to enhance productivity and simplify job functions.
Moeller noted that generative AI is particularly beneficial for newcomers in the financial sector, allowing them to operate with lower costs. Additionally, AI can assist family offices that manage wealth for high-net-worth individuals, helping them stay competitive against established wealth management firms.
“Banks that have traditionally had little presence in wealth management can now enter the field with AI-driven services, eliminating the need for substantial investment in human advisors,” Moeller explained.
The growing adoption of AI is further fueled by shifts in customer behavior. Younger entrepreneurs are increasingly inclined to handle their investments independently, prompting banks to develop AI-driven tools that allow clients to consolidate financial information on their own.
“Clients should have access to detailed financial insights around the clock. Even portfolio management can be managed effectively with conventional AI,” Moeller said.
At present, AI does not provide direct recommendations on investment products or specific financial decisions. However, advancements in “agentic AI,” which is designed to make autonomous decisions without human oversight, are expected within the next two years.
As AI-driven solutions continue to evolve, their role in the financial sector will only expand. Businesses that adapt early will gain a competitive edge, while those slow to adopt may struggle to keep pace.
Given the ways in which other tech firms like Meta Platforms Inc. (NASDAQ: META) are transforming their offerings with the help of AI, it isn’t farfetched to envision the wealth management field turned on its head by artificial intelligence tools.
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