According to the 2016 Capgemini WorldWealth report, 56% of net income is at risk due to client attrition from lack of digital capabilities, with over two-thirds of high-net-worth individuals (HNWIs) now looking for automated advisory services. When bots and wealth managers work together, they better serve clients’ needs, improve the experience and increase loyalty. And because AI scales to meet demand virtually without limit, employees can spend more of their time on higher-priority client interactions, resulting in both cost savings and service quality benefits.¹

While popular culture has defined AI as artificial intelligence, we believe the term “augmented intelligence” is far more accurate. The combination of machine learning, deep learning technology, bots and intelligent agents on a powerful cloud computing platform has ushered in a new era of computing. This is defined not so much by what machines can do independently or as human substitutes, but rather by how they can amplify human will and action as tireless auxiliaries in countless arenas.

We must recognize this new kind of computing both for what it is and what it is not.

• AI is not merely a new tool. It’s a radical shift that makes technology what it always should have been – ubiquitous yet invisible and intuitive to use.
• AI is not about replacing humans. It’s about harnessing humanity’s collective knowledge and experiences to make better decisions and enrich how we understand and relate to each other and our shared world.
• AI is not about robots. It’s about making life easier with intelligent services that anticipate our needs, organize our working environment and perform time-consuming repetitive tasks, freeing humans to be more creative and productive.

Financial services organizations have been tangling with data since the very beginning, but as we look ahead, the most impactful data-driven solutions will go well beyond analytics and include built-in intelligence based on deep learning technology that augments an organization’s capabilities in compelling new ways. Solutions that see, hear, speak and understand our needs and emotions – using natural methods of communication, enhanced by vast amounts of data from sources as varied as search engines, news, videos and more – will transform every aspect of the business.

• See. Identify faces, text and objects to empower machines to continuously survey their surroundings – for example, facial pattern recognition for security.
• Hear. Recognize voices, languages, key phrases and topics to rapidly convert speech to text – for example, voice to text for real-time translation services.
• Speak. Seamlessly convert text to speech to enable a natural two-way dialogue with technology – for example, turn lists of FAQs into a voice-based service.
• Understand. Contextually infer intent and sentiment to personalize interactions and recommendations – for example, know when to do a warm handoff from chat to a live agent on sensing client frustration.

Private and wealth management clients have come to expect highly personalized experiences, which are hard to support with disconnected channels and systems. With the rising bar of client expectations, the need for quick, secure and highly personalized solutions is paramount. Contextual insights can be delivered at scale to wealth managers to help them prioritize their day, engage clients, identify opportunities and remain compliant. This empowers them to do what they do best: build long-term rapport and trust by confidently helping clients solve their most important financial challenges. Despite the increasing speed, complexity and scale of the financial services industry, solutions are at hand to bring it under control, making every interaction personal, relevant, compliant and at scale.

Consider the following scenarios:

• Obtaining a 360-degree view of the client’s portfolio and using automatic suggestions to improve or advance engagement. The next best action capabilities that make this possible leverage advanced machine learning algorithms to consume client data from customer relationship management (CRM) systems, understand client sentiment and generate relevant and targeted conversations with full orchestration across all the channels a client chooses to use.
• Accessing immediate status of client relationships, preferences and needs. Solutions for real-time insights incorporate tools such as sentiment analysis and business network alerts. These help you assess the likelihood of a meaningful event occurring that might require a timely call from a wealth manager. Personally tailored encounters can engage and delight clients with information and invitations that are relevant to them.
• Managing regulatory changes and compliance. Automate legal and disclosure communications, documentation and record keeping – for example, when an advisor calls this can be monitored and key words can prompt the advisor that certain documentation needs to be signed before further advice can be given.
• Mitigating false alarms with AI-enabled fraud prevention. When a positive fraud event is triggered via an AI model, bots send alerts to clients that corrective measures are being taken.
• Develop new business models, create new products and services, and make data-driven decisions faster than ever before. For example, new wealth advisory services that incorporate AI – which enables quality advice at a much lower cost – as an adjunct to human advisors promise an optimal mix of technology and human intelligence.
• Omni-lingual, instantaneous localization, which can radically simplify how existing services expand into new geographies globally or into previously underserved communities domestically. Such services will dramatically shorten the time to market for new capabilities, providing even more capital to invest in innovation.

The financial services industry is already realizing how bot applications can bring value to several aspects of client engagement and can increase client engagement without increasing costs, such as those listed below:

• Internal knowledge base bots that help employees search documents, policies and locate client information.
• Self-service chatbots that answer clients’ questions and direct them to the best resources for further assistance in scenarios such as portfolio status, appointment booking, update on process status, new reports and events.
• Transactional bots that answer simple questions and send alerts for flagged events, such as when a tax event is due or when a trading order closes.
• Secure authentication bots that handle automated authentication through secure channels to complete transactions.

More and more investors are turning to advisory services augmented with robo-advisors for essential investment needs because of their convenience, ease of use, affordability and transparency. They can provide a range of advisory services, from personalized, automated, algorithm-based portfolio management to sophisticated tax strategies and risk management, all at a markedly lower cost than the traditional advisory model. And while they won’t replace the traditional advisor any time soon, they will give human experts far greater reach, enable them to better harness relevant information sources and provide them with much-needed support for entry-level investment needs. In this way, wealth management services become much more accessible to mass markets, giving those of more modest means the tools they need to build wealth for the long run. Meanwhile, more sophisticated needs can be served by wealth managers who have better insight served through to their fingertips, ears and eyes.

For those of you curious to know how this will be delivered, the following four ingredients are key:

• Agents. As an example, Cortana, Microsoft’s digital agent, makes interacting with technology as easy as having a conversation. It works across devices – including iOS and Android-based – and surfaces information about your daily tasks in work and life, often before you know you need it. And, the more you use it, the more personalized your experience will be. To date, there have been 12 billion queries or questions asked of Cortana, and over 145 million active users.
• Applications. Intelligence must be infused into every application with which we interact, on any device, at any point in time. We are building applications core to your productivity and communication, as well as business processes, to empower employees to focus their attention on what matters most. When all applications are powered by shared intelligence, entire organizations can act in an integrated, harmonious way, using a rich data model that can infer intelligence from everywhere.
• Services. We’ll make these same intelligent capabilities that are built into our own apps available to every application developer in the world. Every interface that humans use to interact with technology and the world around them matters. As we build intelligence into everything, whether it’s your keyboard, your camera, or your business applications, we are teaching applications to see, hear, predict, learn and act. The fruits of years of pioneering R&D work on speech and vision can be found in Skype Translator, Cortana, our cognitive services application programming interfaces (APIs) and the Bot Framework.
• Infrastructure. We’re building the world’s most powerful AI supercomputer and making it available to anyone. AI requires a complete transformation of underlying infrastructure, from the silicon all the way up to the cloud. As we improve the performance, scale and sophistication of our global, hyper-scale, cloud infrastructure, we’re enabling scenarios that were simply not possible before.

Although not a wealth management example, it’s worth considering how Microsoft recently migrated its entire treasury suite to the cloud. Today, Microsoft’s $100 billion-worth of assets are managed via the Azure cloud, including treasury apps, analytics tools and trading ledgers, and AI is used to support decision-making:

• Operations in 191 countries and more than 30 currencies.
• More than US$300 billion annual cash movement.
• Approximately 2000 bank and custody accounts and relationships with 95 banks.
• 18,000 annual portfolio trades per year, totalling approximately US$600 billion.
• More than 10,000 wire transfers processed per year.

It is an unprecedented time for the industry, with extremely high regulatory scrutiny. As the financial services sector seeks ways to drive product, service and business model innovation and address the cost-reduction imperative, the cloud clearly offers a compelling opportunity for a new era of agility, especially given its potential to scale on demand. But at the same time, trust is a critical concern. Cloud solutions must meet the sector’s high standards for data security, privacy and regulatory compliance, just as the frequency and sophistication of cyber attacks grow and become the “new normal”. While clients are increasingly global and mobile, they expect transparent, intuitive and consistent service anytime, anywhere. This means today’s leading financial institutions must find ways to better understand their clients and efficiently expand services if they want to be industry leaders tomorrow.