What's New In Wealth Management For 2018?
The wealth management industry is changing and expanding fast. According to EY, today's wealth management market is worth over $55 trillion and will reach close to $70 trillion by 2021. To sustain the growth momentum, industry leaders are looking to digital transformation.
Here, we take a moment to talk about some of the technology that is out there and is poised to have a huge transformative effect on the wealth management industry in 2018 and beyond.
We also spoke with an expert — one who has spent the past 13 years working in finance and corporate planning. His name is Alexey Shirobokov. He is the CEO of the AITrading platform.
AI-based expert systems
In most cases, the next-generation tech enables wealth managers to address clients' specific goals and generate real-time insights. In others, it goes even further, suggesting that ordinary investors and traders don't actually have to entrust money to human advisers at all. Indeed, AI-based expert systems and autonomous machine learning algorithms are now fundamentally transforming the way the wealth management industry works and are driving both the investing and trading experiences to a whole new level of automation and efficiency.
"Today, AI-based trading engines are capable of tailoring unbiased advice to the unique circumstances of each individual investor," says Alexey Shirobokov, CEO of AITrading, an AI-powered information platform that is aimed at leveling the playing field between wealth managers and ordinary investors. "While Goldman Sachs, Man Group, Protege Partners, and a number of major corporations have already built their own AI-based expert systems in-house, we will provide access to the AI as a service model for the entire trading community, along with individual investors in a simple, one-click manner within an easy-to-use platform," adds Alexey.
According to Deloitte and Citigroup, AI-powered robo-advisors could eventually take up to 15 percent of the wealth management industry in the U.S. alone and are expected to account for more than $16 trillion worth of assets under management globally by 2025. However, further growth and desirability of the AI sector will depend heavily on advances in natural language processing, machine learning, cybersecurity, and a whole plethora of cutting-edge technologies and innovations in related fields. Below, we discuss one of the most illustrative examples of it.
Digitized assets and transactions
The rule of the digital transformation game is simple: everything that can be digitized and automated will be digitized and automated sooner rather than later. And as we have seen with the AI-based expert systems, wealth management strategies and trading ideas are no exception.
However, with the emergence of the blockchain, the companies working on AI-based robo-advisors have revealed plans to expand this market further to get the best out of the digital ledger technology that powers Bitcoin and hundreds of other digitally-native cryptocurrencies.
"By design, blockchain can track just about anything of value and ensure data integrity by storing it in a digital environment, where trust is not assured by a middleman," explains Alexey. "As an immutable record, the blockchain technology will serve as a means to verify and audit all types of digital assets and transactions on the AITrading platform—from trading ideas and algorithms to smart contracts and ratings. We see it as a new blockchain-based distributed trade repository and aim to build a full-fledged trading platform off of it," adds Alexey Shirobokov.
Indeed, blockchain-based wealth management firms could become systemically important hubs for the industry due to their inherent ability to bring together next-generation tech—such as platform-specific digital currencies, marketplaces for digital assets, and AI-powered analytical tools—in one single platform and their ability to facilitate community engagement by deploying transparent rating and reward systems. In a matter of months, such a platform could be up and running to form the backbone of the new digitally transformed wealth management industry.