A Microsoft (MSFT, Financial) executive highlighted the transformative potential of artificial intelligence (AI) in the wealth management sector. The technology's ability to process information could significantly lower entry barriers for startups competing with established banks. Martin Moeller, head of AI and generative AI for financial services in Europe, the Middle East, and Africa at Microsoft, noted that AI's capability to integrate financial data allows fewer people to deliver services that previously required entire banking teams.
Moeller emphasized that generative AI will reshape the competitive landscape, reducing market entry barriers for new players, akin to past digital and internet waves. Since early 2024, Swedish payment service provider Klarna has leveraged AI technology from Microsoft's partner OpenAI, effectively replacing the work of 700 employees. Additionally, UBS, the world's largest asset manager, recognizes AI's potential, with CEO Sergio Ermotti stating it could boost productivity and ease work processes.
AI is expected to lower costs for newcomers and enable family offices to compete with wealth management firms. Moeller pointed out that banks, previously inactive in wealth management, could enter the sector without significant investment in client advisors, thanks to AI. The shift in customer behavior, with younger entrepreneurs preferring to manage their investments, is driving AI's momentum. Many banks are working to empower clients with AI tools for independent information integration.
While AI currently doesn't offer specific investment advice, the next development phase—agentic AI, capable of making independent decisions without human intervention—is anticipated in about two years.
