The wealth management industry is set for a major overhaul? Microsoft executives predict that AI will fundamentally transform the competitive landscape.
1min read A Microsoft (MSFT.US) executive stated that artificial intelligence will bring significant changes to the wealth management industry, with the technology's immense potential to process information significantly lowering the barriers to entry for competing with established banks.Microsoft's head of artificial intelligence and generative AI for Europe, the Middle East, and Africa in financial services, Martin Moeller, said the ability of AI to integrate financial data would allow a few people to provide services that previously required an entire bank team.Moeller stated: "Generative AI will reshape the competitive landscape. For example, AI will significantly lower the barriers to entry for start-ups, just as the digitization and internet waves did decades ago."Since early 2024, Swedish payment service Klarna has been using AI technology from Microsoft partner OpenAI to complete the work of 700 employees.Global asset manager UBS (UBS.US) has also seen the potential of AI. Chief executive Sergio Ermotti said this month that AI can improve productivity and make work easier.Moeller said generative AI would lower the cost of new entrants, while also helping family offices compete with wealth management firms."Those banks that have been almost absent in wealth management can enter the business with the help of AI without having to invest heavily in client advisers," he said.The development of AI is being boosted by changes in customer behavior, with more young entrepreneurs willing to manage their investments themselves, Moeller said.Many banks are working to enable customers to use AI to independently integrate information."Customers should be able to access complex information 24/7," Moeller said. "Portfolio construction can also be done by traditional AI."At present, AI does not provide products or specific investment decision recommendations, but the next stage of development — so-called "agent AI", which can make independent decisions without human intervention — is expected to arrive in about two years.
