Fintech is thriving. That has a lot of people excited. Consumers are thrilled to be getting more convenient services, innovators are interested in creating their own companies, and investors are seeking opportunities to take advantage of this technological revolution.
Of course, not everyone’s happy. Many working in the traditional financial services industry fear that the rise of fintech will mean the loss of jobs.
This is an understandable concern, but it may not be warranted. Fintech startups may benefit from leveraging the latest technology, but the people who start these businesses may lack experience when it comes to navigating financial regulations. Banks can partner up with them, offering their expertise in exchange for renewed relevance.
It’s also worth noting that many of the emerging and developing technologies driving fintech can actually help those in the financial services industry work more efficiently and effectively. For example, many fintech startups are incorporating artificial intelligence to offer enhanced services to their customers. Financial advisors can also use AI to serve their own clients better than ever before. Here’s how.
Streamlining the Research Process
Financial advisors compile and release research reports indicating the potential growth of investment opportunities. Putting these reports together takes significant time and effort. The more time advisors devote to this task, the less time they have to focus on other responsibilities.
That’s why many are starting to turn to AI to analyze data and compile research reports. While some clients are initially reluctant to trust a report generated by a machine, as they learn more about just how accurate this technology can be, they may embrace the advantages of this option.
Increasingly, the role of financial advisors will involve less time spent conducting research, and more time providing interpretation. An AI program may be able to sort through massive amounts of information and data with greater efficiency than a human being, but a human being must still interpret the AI’s findings to help clients make choices that align with their goals.
Financial advisors shouldn’t see AI as a threat. Instead, AI will likely boost the accuracy of their research reports. Clients will be more likely to trust professionals who offer advice rooted in accurate reporting.
The role of a financial advisor is to, well, offer advice. At least, that’s true in theory.
The problem is, many clients often find that when they contact a firm with a question, there are no specialists available who meet their needs. This is particularly true outside of normal business hours.
Some experts believe that AI is poised to change this. AI technology is improving rapidly, to the point where it won’t be long before interacting with an AI feels remarkably similar to interacting with a human being. Financial advisors could use sophisticated AI chatbots to address client needs when they’re unavailable. This improvement in customer service will, in turn, boost overall client satisfaction.
Financial advisors are often burdened with repetitive tasks that prevent them from interacting directly with their clients. Budgeting, assessing fees, and related responsibilities may soon be automated via the use of AI software.
This may free up time for financial advisors. They’ll have greater opportunities to cultivate genuine relationships with their clients. Again, AI currently lacks the ability to truly empathize with another person. An AI program can’t meet with clients to discuss their personal financial goals. That’s the role a human financial advisor will always play.
When financial advisors have more time to focus on client relationships, they’ll be able to play that role much more reliably.
That said, using AI-based chatbots could supplement the traditional methods of developing relationships with clients. Chatbots can ask and answer basic questions, gathering key data about clients that can be used to build “profiles” advisors can reference whenever they need to learn more about clients. These profiles won’t replace genuine relationships, they’ll simply make them easier to maintain and grow.
Although the benefits of using AI as a financial advisor are clear, that doesn’t mean that everyone working in this industry is willing to adopt the technology just yet. Some experts believe this is partly the result of generational factors. Advisors who either don’t trust or don’t understand AI may be reluctant to implement the technology.
They should give it a chance. As more and more Millennials start acquiring wealth, they’ll expect that the people who help them manage it will use technology to offer convenient, quality service. AI and fintech don’t need to pose a threat to financial advisors and related professionals. Instead, these technologies can be useful tools.