Revolutionizing Wealth Management: The Role Of AI, Machine Learning, And Big Data In Personalized Financial Services

Abstract

Financial institutions invest enormous amounts of money and other resources in many areas. One of the big development areas is wealth management, outsourcing the investment advisory services of employed investment professionals to software solutions based on artificial intelligence technology. Driven by technology, fintech startups have emerged to challenge the traditional industry, creating disruptive innovations that have attracted many new customers and hundreds of millions of investments. This paper provides an overview of a FinTech phenomenon when so-called Robo-advisors revolutionize wealth management. The objective is to introduce Robo-advisors as a low-cost, scalable, unbiased, and convenient method of automated investment recommendations and wealth management. The focus is on the investment advisory services of wealth managers and global trends influencing wealth management. The financial services industry is one of the first, most heavily regulated, and examined industries. The universal banks of the large systemic institutions have dominated financial services with their personal, local knowledge, and tailored services to affluent private customers. Because of the high profitability of the wealth management business, resistance toward large cracks, such as those suffered in investment banking and assets management, has remained firm. However, the last decade-long before the recent massive global market offensive held up by FinTech incorporated experiments at their…