AWM firms bet on analytics, insights, and customer experience for GenAI impact

In 2024, just a little over a year after ChatGPT was launched in November 2022, generative artificial intelligence (GenAI) has already touched millions of lives and organizations worldwide. It awakened many possibilities that were just an idea or dream until recently. Industry fervor about GenAI has compelled financial services executives to explore this magic-like tool to achieve a serious competitive advantage.

Every industry and business function can find unique contextual approaches to getting value from GenAI. In HFS’ recent study, HFS Horizons: The Best Service Providers for Asset and Wealth Management, 2024, we evaluated the capabilities and offerings of 22 of the leading service providers working with the asset and wealth management industry segment, representing nearly 3,000 clients. Not surprisingly, we learned that all the companies covered in this study were investing in GenAI via new offerings or by reimagining current business solutions.

In this POV, we will explore some successful GenAI client stories from various service providers and the top use cases our recent study discussed.

In early implementations, AWM enterprises will use GenAI primarily to improve individual tasks

Approximately 73% of the AWM enterprises in our survey are optimistic about the impact of GenAI. In the near term, this emerging technology can improve productivity, personalization, and prediction, impacting all levels of the organization—individuals, teams, and the ecosystem. GenAI is a versatile technology the AWM industry can apply in every business function, as it has the potential to assist, augment, and transform business processes. However, in early implementations, enterprises will use it to improve individual tasks, such as augmenting and automating tasks for knowledge-based roles.

Exhibit 1: GenAI could transform various aspects of AWM services, including analytics, insights, customer experience, and software engineering

Sample: N = 33 AWM enterprise respondents, N = 22 service providers supporting 2,823 AWM firms
Source: HFS Research, 2024

GenAI has the power to transform CX and EX

Our research captured several examples of enterprises considering use cases to transform customer experience (CX) and employee experience (EX).

84% of service providers shared GenAI use cases to enhance analytics, market intelligence, and strategic decision making in the AWM industry

Accenture shared a client story illustrating how it helped a private EU bank increase advisor productivity and drive cost efficiency with a GenAI-based solution. The project leveraged GenAI to review large datasets and create a copy based on advisor needs, enabling advisors to spend more time on higher-value, revenue-generating activities.

Providers shared analytics use cases for intelligent document processing (IDP) for text analysis, speech analytics at scale, and image and video analytics using AI, computer vision, search, and knowledge management platforms.

Market intelligence use cases include assessing, summarizing, and monitoring insights and reports for investment research, factsheet assistants, and sales and marketing solutions like marketing content generation and campaign generation and analysis.

Strategic decision-making use cases include customized queries to aid decision making for investment managers and to monitor and predict changes in sustainability factors to inform future asset allocation decisions.

68% of service providers provided GenAI use cases for augmenting customer service and advisory

Capgemini provided HFS with a case study showcasing how it used a GenAI-powered tool to analyze client emails and other communications to gauge sentiment between customers and support center staff. The sentiment-based categorization helped advisors quickly understand the communication history and proactively route customers to reduce iterations and improve CX.

Customer service and advisory use cases include advisor digital assistants, chatbots, omnichannel ops, digital conversational automation solutions for clients, personalization at scale, customized services and portfolios, automating customer services, automating meeting preparations and minutes of meetings, investor digital assistants for advisory services (robo-advisory), and fund performance analysis.

32% of service providers have GenAI use cases to augment software engineering

Cognizant mentioned several active engagements with clients, including bringing code snippets, developing code from available internal libraries, verifying checklists of best practices, analyzing multi-language code, developing documentation, migrating code, and resolving incidents.

One use case generates synthetic data to accelerate the development of generative models to reduce time and cost while protecting sensitive information. Another increases software development and testing productivity via AI developer assistance to generate code, conduct testing and resolution, produce documentation, moderate cybersecurity pressures through intelligent vulnerability scanning, and detect threats.

26% of service providers anticipate using GenAI to smooth customer journeys

Ciklum shared a client story outlining its GenAI pilots with one of the top five largest venture capital (VC) funds; it has more than $75 billion in assets under management and focuses on software companies. Ciklum is helping the VC firm develop an insights-related platform by accessing its proprietary content through GPT-based chat interfaces, enabling VC teams to support and serve their portfolio companies at scale.

Infosys shared a case study using GenAI to search and summarize documents related to one of the largest wealth management firms’ wealth clients and efficiently answer queries.

Customer journey use cases include managing client lifecycles from onboarding, know your customer (KYC), monitoring of suspicious activities in real time, optimizing visibility and searchability of status and progress across disparate internal workflows, and tailoring reporting at scale for internal and external stakeholders based on their needs, such as tax, fund, client, or regulatory.

11% of service providers leverage GenAI to improve AWM operations, ESG insights and reporting, and frameworks for responsible AI and governance, respectively

NTT DATA has developed a new electronic trading tool that uses GenAI to help with trading financial products like derivatives, especially for assets that are not usually easy to trade due to their lack of liquidity. The solution involved the timely reconstruction of volatility surfaces by leveraging variational autoencoder models.

Use cases for AWM operations include optimizing the trade lifecycle through identifying, predicting, and resolving exceptions (e.g., breaks and fails); analyzing root causes for exceptions; augmenting cash management by analyzing real-time cash positions, market conditions, risk, and investment opportunities to optimize cash allocation; automating reconciliation activities such as security pricing, corporate actions, and cash and position balances; reducing human error; and improving speed and accuracy.

The Bottom Line: Scaling GenAI use cases is challenging. Service providers can leverage technology, experience, and consulting capabilities to help AWM enterprises in their digital transformation journey with GenAI.

2023 was a year of GenAI experimentation with use cases and pilots. 2024 will be a year of implementing GenAI at scale and continuing experimentation. We must remember that GenAI is just technology—not a solution—and it works best when trained on industry-specific data. The AWM enterprises that can successfully implement GenAI at scale across the industry boundaries and make this blue ocean strategic move will have a serious competitive advantage.