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Wealth management firms to boost AI budget from 16% to 37% in 3-5 years: Wipro survey
More than three-quarters (77 percent) of surveyed firms report improved decision-making with AI-driven predictive analytics, and 76 percent note overall operational efficiency improvements
"Many of the people in big companies, I think, are downplaying the risk publicly," Hinton stated, adding that this public stance often contradicts their private understanding of the perils. He specifically highlighted Demis Hassabis, CEO of Google DeepMind, as a rare exception, commending him as one of the few who "really do understand the risks and really want to do something about it."
Technology services and consulting company Wipro has projected an uptick in Artificial Intelligence (AI) investments in wealth management companies.
According to a report by Wipro, the IT budget allocations for AI are expected to more than double within the next three to five years. The report mentioned that the AI budget investment will increase from 16 percent to 37 percent by 2029.
The report, 'AI in Wealth Management: Navigating an Evolving Data-Driven Landscape,' mentioned that companies indicated that they have started adopting AI in different parts of their operations. The firms said they have experienced an advantage due to AI adoption. However, 44 percent said they were using AI extensively in their operation such as client management. 65 percent of the firms have expected significant AI-driven changes in client relationship management over the next 1-2 years.
Overall, more than three-quarters (77 percent) of surveyed firms report improved decision-making with AI-driven predictive analytics, and 76 percent note overall operational efficiency improvements. Meanwhile, risk management is one of the key areas AI disrupts, according to more than half (53 percent) of the firms, followed by research and analysis (45 percent).
The report underscored the pivotal role of advisors in effectively integrating AI into financial advice to meet the diverse and evolving needs of investors.
The surveyed firms in the repoprt highlighted the challenges related to the regulatory environment. Almost two-thirds (62 percent) of firms identify the absence of clear regulatory guidelines as a top challenge in AI adoption. Additionally, the majority of firms highlight regulatory and compliance challenges (55 percent) and biased and discriminatory outputs (54 percent) as significant barriers to AI adoption.
"This technological shift comes at a time when the industry faces several challenges, including pressures on Assets Under Management (AUM), fluctuating revenues, increasing operational costs, and rising client expectations. In this context, AI emerges as a powerful tool to deliver customized wealth management guidance, optimized client satisfaction, and maximize financial returns," Ritesh Talapatra, Vice President and Sector Head for Capital Markets and Insurance, at Wipro Limited said.
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