Data & Analytics Insights

Digital wealth: The pivotal role of AI, data and analytics 

Sarlota Hohwald 

Director, Content Solutions

The first insight in this two-part series, explores the digital transformation dynamics shaping the wealth industry today – considering the way AI, analytics and growing volumes of data are democratising the wealth management space. 

  • More self-directed investors are harnessing the power of digital tools and AI to optimise their investment strategies.
  • The growing availability of data represents a powerful opportunity to optimise investment decisions and maximise wealth, if you are able to seize it.
  • This insight looks at how wealth firms and advisors must ensure they meet the changing needs of a new breed of tech-savvy investor to succeed.

The impact of AI in digital wealth 

Accelerating digital transformation across the globe continues to shape the wealth industry. Digital capabilities are already critical in the wealth space, and their importance will only continue to grow as investor expectations evolve.

More self-directed investors are harnessing the power of digital tools to optimise their investment strategies, and this is hardly surprising, given that digital capabilities offer speed, efficiency and 24/7 connectivity. What’s more, ongoing developments in technology are increasingly game-changing, with AI poised to reshape the investment landscape.

Our research,[1]  focused on changing preferences and emerging trends in the wealth industry, reveals that 69% of providers generally agree that AI will significantly change the way they operate. Almost all providers identify themselves as “advanced” (48%) or “mid-implementation” (44%) for AI automation.

Such automation can be applied to a wide range of tasks, from research and identifying opportunities based on investment preferences, to managing the administrative burden and conducting risk analyses.

A wealth of data – the challenges and opportunities

Alongside this AI revolution, the data revolution continues apace, with ever-increasing volumes of data and content now available to wealth industry players.

The growing availability of data represents a powerful opportunity to optimise investment decisions and maximise wealth. More data means that investors can make more informed decisions by, for example, incorporating sentiment analysis and assessing the market’s “pulse” across thousands of global news and social media sources.

At the same time, more data presents challenges: wealth stakeholders face a data and information overload – and one that is compounded by a host of other factors, including increased market volatility and the relentless pace of change in highly dynamic markets. The ability to find the signal in the noise has become crucial to success, and this means that it is essential to properly manage ever-increasing volumes of information.

Furthermore, investors do not feel equipped with the data and content they need to make investment decisions,  and this presents firms – from online brokers and banks to wealth management firms and self-directed investor platforms – with a clear opportunity to deliver trusted data, advanced management tools and analytics.

To extract true value from data, wealth managers, advisors and investors alike need to be able to pinpoint relevant information within volumes of incoming data, so that they can correctly identify opportunities, navigate risks and make better investment decisions. The increasing availability of data, coupled with the democratisation of fintech products, means that investors can now tap into advanced tools, value-added analytics and predictive financial modelling to optimise their investment decision making and manage risk.

Finding the signal in the noise

To succeed within a dynamic and competitive digital wealth space, wealth industry stakeholders need to embrace digital capabilities, ensure access to comprehensive data, and tap into tailored insights. This empowers them to generate successful investment ideas and investment decisions for long-term success.

At LSEG, we have the data, analytics and tools to hyper-personalise information and insights in the areas that matter most in today’s market, such as ESG investing and news tailored to your needs, incorporating exclusive content from Reuters and other major global sources.

We leverage advanced AI for speed and efficiency, and our market-leading content means that we can provide trusted, comprehensive data and targeted analytics to help investors and advisors find the signal in the noise. We also offer flexible delivery and omni-channel capabilities to meet evolving investor and advisor needs.  

Click here to read the second insight in this two-part series, in which we look at the importance of balancing digital capabilities and personalisation.  

[1] Commissioned by LSEG and conducted by ThoughtLab, this 2023 research included global surveys of investors and investment providers and was based on a survey of 2,000 investors across countries, wealth levels, ages, lifestyles, occupations, gender, and other characteristics.

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