Artificial intelligence is presenting “pivotal” capabilities for wealth management firms with EY breaking down which uses are presenting the most benefits.
Some 64 per cent of wealth managers said they had seen an “incremental impact” from the use of AI while a third had seen a “substantial impact”, covering products like ChatGPT, Gemini, Microsoft Copilot.
Mid-sized wealth managers with assets under management (AUM) between $500 million and $25 billion report significant cost savings in compliance and risk management from AI usage.
These mid-sized firms prefer a strategic and selective approach to its use, focusing specifically on 6-9 high-impact uses.
Whereas large asset managers with AUM up to $2 trillion-$25 trillion have found substantial efficiency gains in their IT infrastructure. Unlike the mid-sized managers, large firms are significantly scaling up their use of AI with over a third planning more than 15 new use cases within two years.
“Many initial deployments of GenAI have delivered clear operational successes across compliance, risk management and IT infrastructure for both wealth managers and asset managers,” EY wrote.
“After these core back-office functions, the next three departments realizing the greatest cost savings are sales and marketing, client services, and client acquisition and onboarding, showing signs that front-office operations are a growing area of interest and investment.
“While risk management and middle-/back-office use cases continue to be a core focus, strategic investment priorities moving forward include a broad range of front-office functions. Firms expect to invest in client engagement activities including lead generation, client behavior modeling, scenario planning and various use cases supporting advisors in their client service roles.”
Specifically on front-office functions, 68 per cent of wealth managers would like to use it to provide adviser recommendations on the next best action for clients, for personalised investment strategies and automated personalised client outreach.
Regulatory and privacy issues were the biggest concerns (84 per cent of wealth managers) preventing greater usage as well as the risk of inaccuracy and hallucinations (66 per cent of wealth managers) which EY said is causing distrust among users and impacting adoption. Interestingly, asset managers reported more concern about AI than their wealth manager peers despite asset managers being keen to scale up their use.
While firms currently report only a modest impact on headcount from AI, this is unlikely to last as 68 per cent say they anticipate “substantial workforce transformations” within the next five years, particularly for middle and back-office roles.
“The emergence of agentic AI will further accelerate this shift, transforming traditional roles into more strategic oversight positions. Routine analytical tasks and repetitive processes are likely to be increasingly delegated to AI agents, compelling executives to strategically realign workforce capabilities.
“Proactive workforce planning, targeted skill development and effective change management initiatives are essential for smoothly managing this transition and providing organizational readiness for an AI-driven environment.”
