DWN recently connected with Jeff Koeneman, Chief Experience Officer of TIFIN AG, a technology platform that serves as the AI partner driving asset growth for wealth enterprises. Our interview below covered a number of key areas including pain points for wealth enterprises, how AI models are used to help drive growth and where TIFIN AG sees the future of the wealth management industry headed.
DWN: To start, can you provide an overview of how TIFIN AG utilizes AI to help wealth enterprises drive growth?
Chief Experience Officer (CXO): At our core, TIFIN AG exists to bring more people into the world of financial advice. We achieve this by creating machine learning models that generate insights, signals, and intelligence to help wealth enterprises grow faster. Under the hood, we utilize a combination of advanced algorithms to analyze data across a wealth enterprise including information such as historical transaction flows, advisor activity within the CRM, conversion data, content engagement from digital marketing efforts, and the like. Our trained models then learn from behavior and intent to identify growth opportunities by providing valuable insights and predictions based on historical and real-time information. They are delivered to advisors at the right time and through the most optimal channel, which tends to be their CRM.
DWN: What specific challenges or pain points does TIFIN AG address for wealth enterprises, and how does it deliver measurable value to its clients?
CXO: Organic growth has long since been a challenge for wealth enterprises. An SEI survey from late 2023 found that wealth firms experience 4-6% in annual outflows from client distributions and lost clients, which means they must grow current assets by at least that much just to break even. Furthermore, many wealth firms have faced challenges adopting artificial intelligence into their practices, due in part to a lack of in-house expertise or the right vendor partnerships.
TIFIN AG sits at the intersection of these pain points – firms partner with us because of our domain knowledge in the wealth management space and our team of expert data scientists, who have developed and trained AI models with a primary goal of generating organic growth signals. We aim truly to be an outsourced data science team for wealth enterprises who are hungry for growth and willing to adopt AI to grow faster. TIFIN AG now has a full menu of data science models that address specific growth questions, such as ‘Which of my clients are at-risk of moving assets elsewhere?’ or ‘How can I uncover new connections for client referrals?’.
DWN: How does TIFIN AG ensure the accuracy and reliability of the AI models used in your platform?
CXO: We prioritize accuracy and reliability by employing rigorous supervised training processes. Our models are validated against diverse datasets, and we continually refine them to adapt to evolving market dynamics. Regular audits and updates are conducted to enhance the models’ performance and ensure they align with the specific needs of wealth enterprises.
DWN: Can you elaborate on a specific success story where TIFIN AG’s AI models significantly impacted a wealth firm’s growth strategy?
CXO: A wealth enterprise came to us because their research shows their advisors only capture about a third of their existing clients’ assets. While they have robust CRM and practice management capabilities, they lack the right AI capabilities to mine their data to extract actionable intelligence from this data. We employed our ‘Wealth Consolidation’ model across a segment of their advisor base which led to a 1.0-1.5% increase in AUM over a 6M period, which reiterated TIFIN AG’s ability to predict consolidation opportunities and the direct impact of our innovative solutions can have on driving business growth. This was the first stage in a longer-term collaboration with the firm.
DWN: How does TIFIN AG address concerns related to data privacy and security when working with sensitive CRM and Marketing Automation data?
CXO: Data privacy and security are paramount for all AI/ML applications and we strictly adhere to industry regulations. We deploy robust encryption protocols and ensure that sensitive Personal Identifiable Information (PII) is fully protected and secured at the highest levels possible. We work closely with our customers to establish and maintain compliance with relevant data protection standards.
DWN: In what ways does TIFIN AG’s platform differentiate itself from other solutions in the market that also claim to assist wealth enterprises in uncovering growth opportunities?
CXO: We aim to be an outsourced data science team to help advisory firms grow faster using our AI expertise and infrastructure. I’ve seen companies attempt to hire data scientists to build in-house models or aggregate insights across point solutions but in the end, having a robust data pipeline to train the model on allows us to continuously deliver new growth opportunities. After a model is deployed, we extract activity data such as asset flows, conversions, deal stage, CRM data, etc. that powers a feedback loop, which adapts to each business and becomes highly accurate over time at predicting the next best opportunity with the highest ROI.
DWN: How does TIFIN AG plan to evolve and enhance its AI models to meet the evolving needs of the wealth management sector?
CXO: Our commitment to our core values by delivering impact through innovation at speed will allow TIFIN AG to stay ahead of the curve. Both current and prospective customers frequently bring us new ideas to help them expand into new markets or work upstream to higher net-worth clients. For example, one of our customers has a mortgage business and was looking for ways to identify potential clients for their private wealth division. This was the catalyst for TIFIN AG to build a model that identifies leads from adjacent businesses such as retail, retirement, mortgage, commercial banking, etc. to prioritize referral opportunities for the advisor business within the context of their ideal client profile. In short, we’ll continue to look first to our customers while staying proactive to ensure we expand our storefront and deliver new models that address the dynamic challenges of the wealth management sector.
DWN: What future developments or partnerships can we expect from TIFIN AG to further strengthen its position in the market?
CXO: TIFIN AG actively explores strategic partnerships with industry leaders to enhance our product offering and expand the capabilities of our AI models. We plan to continue to allocate investments towards algo performance improvements, data vendor expansion, and building new packages that address the ongoing growth challenges within the industry. Our main focus right now is to continue providing wealth enterprises with cutting-edge solutions that drive sustainable growth and innovation.
DWN: Lastly, what role do you see AI playing in the future of wealth management, and how does TIFIN AG contribute to shaping that future?
CXO: In some regards, the role of AI in the future of wealth management is already here. We are at an inflection point where we’ve moved away from theory into reality. Everyone is talking about how AI could or should be used across wealth management but TIFIN AG has already implemented AI-Powered Insights across 2,100 advisors at RBC. Accenture’s 2022 Financial Advisor Study found that over 90% of advisors believe AI can help grow their book of business organically by more than 20% and over 80% of advisors believe AI’s greatest benefit is translating client data into actionable intelligence for their benefit.
While many firms are sitting on the sidelines, firms adopting AI will have a fundamental advantage over those not by empowering advisors to do more and deliver better outcomes for their clients. AI creates more personalized experiences for investors across their wealth journeys. It equips advisors with insights specific to the needs, behaviors, and life events of each client.
The issue to date has been deploying AI in a way that is actionable for firms and their advisors. It reflects the difference between just knowing information and strategically acting on that information. TIFIN AG fills this gap by providing intelligence about the next steps advisors can take to deepen their client relationships.
