Transforming Financial Advisory Services with GenAI

A Wealth of Opportunities for Banks and Customers

Advancements in GenAI are not just extending the capabilities of both human and virtual financial advisors, but also putting powerful new tools directly in customers' hands, ushering in a new era of financial advisory services.

On the advisor side, every piece of advice is backed by a deep dive into data, and every client interaction is followed up with personalized, actionable insights. Pre-meeting, GenAI helps advisors come prepared with a comprehensive understanding of each client's financial landscape, ensuring that one-on-one time spent together is both productive and personalized. During meetings, GenAI's real-time assistance means that advisors can offer immediate, data-backed solutions to client's queries.

GenAI is similarly transformative for customers, equipping them with powerful financial management tools like debt management, budgeting advice, and retirement planning. After consultations, GenAI can monitor customers' financial health in real-time, nudging them with personalized alerts about savings opportunities or potential issues. It's like having a financial advisor in your pocket, offering guidance and insights around the clock. GenAI-driven self-service tools allow customers to explore different financial scenarios on their own, from planning for a significant purchase to adjusting their investment strategy, all with the backing of sophisticated GenAI analysis.

More significant Markets, Lower Costs

By enhancing the advisory process and self-service capabilities, GenAI is building bridges where gaps once existed, making financial advice a service for the few and a benefit for the many. Traditionally, personalized financial advice has been a service available primarily to high-net-worth individuals due to the cost of providing such services. However, GenAI can automate many aspects of financial advisory, making it possible to offer personalized advice at a lower price. This allows financial institutes to extend these services to a broader audience, including the mass market and younger investors just beginning to build wealth. At the same time, GenAI brings new insights and efficiencies that serve even the highest-value clients at the firm.

Is This a Heavy Lift?

Integrating GenAI into virtual financial advisory can be challenging, but by understanding the dynamics, early adopters and new entrants can navigate the process successfully. Focusing on specific, high-impact use cases, such as customer service automation (which can be implemented quickly and show immediate benefits), can promote faster ROI and generate valuable momentum for further development.

Similarly, starting with pilot projects to test GenAI capabilities on a smaller scale before expanding requires less time and resources initially. It enables financial advisory firms to explore less conventional and more innovative customer service automation, gather data, and refine strategies before a full-scale rollout.

The industry faces a notable skills gap, with the demand for GenAI professionals far outstripping supply. Investing in training programs for existing staff can cultivate a pool of internal GenAI expertise. Regulatory compliance, another critical area, requires meticulous planning and ongoing vigilance to align GenAI solutions with financial regulations and data privacy laws. Banks can simplify this challenge by developing GenAI systems based on two key concepts: responsible-by-design and responsible-in-design. By incorporating ethical considerations into the design phase of any GenAI system, GenAI system developers can identify potential risks and address them sooner.

Consulting firms often play a pivotal role in guiding banks through this maze, ensuring that their GenAI strategies enhance operational efficiency and customer service and adhere strictly to legal standards.  For example, Wipro is developing multiple consulting-led GenAI solutions and frameworks appropriate to the financial sector. The Wipro WealthAI solution is a comprehensive GenAI platform designed specifically for wealth management, while the Wipro Enterprise Generative AI (WeGA) framework is a versatile tool that enhances GenAI performance while implementing essential guardrails to boost reliability and reduce errors.

Building Trust and Demystifying GenAI

Trust remains a significant barrier to GenAI adoption in financial advisory. Because this technology is still relatively new, especially on the customer side, many people need clarification on how it works and the risks it poses. They may be aware of the potential risks and rewards but want to know how financial institutions address them. Some potential risks include data privacy concerns, algorithmic bias, and the need for ongoing regulatory compliance.

Education is critical to navigating this. Banks must be clear about security protocols, including what they do to safeguard customer data, information, and investments. They must also demystify GenAI and its applications in the financial advisory sector. GenAI will not unilaterally make decisions about handling a customer’s money without the customer’s consent, but customers may assume that GenAI-powered advisory means automated investing. Banks must be clear about the role GenAI does and does not play in advisory recommendations. Banking customers have likely already interacted with GenAI on their bank’s website or mobile app — whether through a self-help chatbot (Eno, from Capital One), a budgeting tool (Wally), or a retirement planner (IndexGPT, by JPMorgan Chase) — but they may not yet be aware of the ubiquity of GenAI, much less comfortable with its growing role in modern enterprises. Transparency will go a long way when it comes to retaining GenAI-skeptical customers.

Similarly, on the advisor side, it's crucial to emphasize that GenAI is designed to augment their capabilities, not replace them. GenAI can significantly help with administrative tasks such as preparing for client meetings and managing follow-ups, allowing advisors to focus on what they do best: providing personalized financial advice. GenAI can quickly analyze customer and market data, equip advisors with insights, and prepare meeting notes. Real-time data processing can improve advisor-client relationships during the meeting by enabling advisors to generate insights faster, forecast potential scenarios, and create plans. After the meeting, GenAI tools can send follow-up emails personalized with the information from the meeting and additional resources. It can keep track of timelines, follow up with customers, and nudge advisors to do the same.

This symbiotic relationship with GenAI not only enables advisors to serve more clients effectively but also contributes to the growth of the firm's assets under management (AUM) and potentially increases fee-based income, showcasing GenAI as a tool for expansion rather than a threat to advisory roles.

Reducing Risks and Expanding Advisory Services with GenAI

When bringing GenAI into financial advisory, many banks will want to start by equipping agents with GenAI capabilities rather than directly unleashing brand-new GenAI tooling on end customers. This allows agents to benefit from GenAI's efficiencies while training the AI systems through their interactions.

Over time, this paves the way for more direct customer engagement with GenAI, enhancing self-service capabilities and potentially leading to more productive advisor-client interactions. The potential for GenAI in financial advisory is vast, offering opportunities to enhance customer service, gain operational efficiency, and extend market reach. By addressing the challenges of AI integration head-on and learning from the successes of early adopters, banks can unlock the full potential of these technologies, paving the way for more inclusive, efficient, and innovative approaches to advisory services.