From Carrots to Kasisto, the wealth management sector is seeing an increase in artificial intelligence being used to help consumers manage their money. The likes of the New York Times and TechCrunch have covered the rise of financial chatbots, clearly showing there is both consumer and investor interest in the sector.
The latest startup to make a splash is Grove. Hot off a 2.1 million dollar raise from well-known investors like First Round Capital and Lowercase Capital, Grove is attempting to fill a financial services niche between traditional wealth management/financial advisory firms and financial services startups offering chatbot conversations as a service. Generating press from everyone from Fortune and Business Insider to American Banker and JPMorgan Chase, this up-and-coming startup is currently the talk-of-the-town in the fintech sector. With the buzz Grove is generating, it got us thinking here at Truelytics whether chatbots are the future of wealth management or just a fad.
According to data from Statista Research, the global chatbot market is expected to generate more than 994 million U.S. dollars by 2024. If even just a small fraction of that amount goes to the wealth management sector, that's a sizable chunk of change that could potentially be going to those in the business of helping others manage their money. Combined with the fact that PWC named simplifying legacy systems and adopting artificial intelligence/robots as their number two priority for 2020 for those in the financial services sector, it's clear that chatbot technology isn't going anywhere.
But how do you make the most of chatbots for your wealth management or financial advisory business? How do you get out in front of this trend without being overtaken by the very technology you hope to share with your existing and future clients? One of the best ways to benefit from this technology is to create your own to share with your clients. There are a host of tools available including Albert and Bottr. Before you jump into the fray, do not forget your fiduciary responsibilities. Your firm must meet all legal standards for protecting the data of your clients. One mistake or data leakage of your clients' data could be disastrous for your firm. Understanding what you don't know when it comes to building a chatbot is just as important as understanding what you do. Always seek advice from your legal counsel.
While it does appear this technology will play an increasing role in the future of the financial service industry, it is a form of technology that should be approached with caution and due diligence. Chatbots might be the future of the services you offer your clients, but they could be the end of your firm if you're not careful. What are your thoughts? Will you be incorporating this technology into your wealth management firm's client offerings?
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