New Telegraph Artificial Intelligence (AI) will bring major upheaval to wealth management, as the technology’s potential to process information vastly reduces the hurdles required to compete with established banks, Reuters reported a Microsoft executive, Martin Moeller, as saying.
According to the news agency, Moeller, who is head of AI & GenAI for financial services, EMEA, at Microsoft, said that AI’s ability to condense financial data will allow just a few people to offer services that previously occupied entire teams in a bank.
“Generative AI will reshape the competitive landscape,” Moeller told Reuters. “AI will, for example, significantly lower the threshold for market entry for startups, similar to what the digitalisation and internet wave did decades ago,” Moeller.
Since early 2024, Swedish payment service provider Klarna has been using AI from Microsoft’s partner OpenAI which performs the work of 700 employees.
The world’s largest asset manager, UBS, also sees great potential for AI. CEO, Sergio Ermotti, said this month it could boost productivity and make jobs easier.
Moeller said generative AI will reduce costs for newcomers, and it can also help family offices, private wealth managers for the super-rich that compete with wealth managers.
Banks that have so far been barely active in wealth management could enter the business with the help of AI without having to invest much in customer advisors,” he said.
AI’s advance is gaining momentum from changing customer behaviour, with young entrepreneurs increasingly willing to manage their investments themselves, Moeller said.
