The often-slower pace of December provides the perfect opportunity to look back on a consequential year for digital innovation in the wealth management space and forward to what comes next in this quickly evolving industry. Artificial intelligence is beginning to live up to its hype and headlines as more and more use cases are found throughout financial services. But IT leaders across wealth management have more than the integration of AI in a personal relationship-centric business on their plate for 2025 and beyond.
Recently, Digital Wealth News spoke with Colleen Bell, President, Innovation and Experience, of Cambridge Investment Research, Inc., to get a sense of where she is steering her firm to leverage technology to streamline operations, elevate the overall advisor and client experiences and realize sustainable growth into the future.
Digital Wealth News: As you look back at this year, what was the most significant technological advancement that drove innovation in wealth management? Was this what you expected to be the biggest catalyst of change?
Colleen Bell: The most significant technological advancement across all industries in 2024 was the widespread adoption of artificial intelligence. Since ChatGPT became the fastest-growing consumer application in history in early 2023, AI has caught the imagination of corporate leaders, investors and regulators worldwide. Early use cases have seen AI begin to transform data-centric industries. There has also been an explosion in firms creating AI and generative-learning systems, platforms and tools to help companies leverage this new technology. Seeing which AI-enabled applications will succeed will be interesting to watch in the coming months.
Wealth management, never known as an industry of early adopters, has begun testing the AI waters to see the possible implications AI can have on the overall ecosystem. We have been diligently testing – and rolling out – AI enabled solutions for our advisors for some time, recognizing its potential to streamline workflows, improve back-office turnaround times and help financial advisors improve efficiency.
DWN: Many have said that 2024 saw the tipping point for the inclusion of AI within the financial services and wealth management industries. Do you agree with that assessment?
CB: Interest in AI started out slowly, with plenty of suspicion surrounding the hype. However, that skepticism had turned to enthusiasm by the middle of the year. While we had seen AI’s possibilities for the home office, what really took the discussion to another level was when the financial professionals started using AI-enabled tools in their practices. Nothing drives the adoption of new technology like success, and advisors and their staff have started to see tangible success. They began using AI tools to help with manual processes like pulling together data for client meetings. Cambridge teams using these tools save an average of 10 hours a week. That’s an extra two hours a day that are being used to work more closely with existing clients or grow practices by prospecting for new business.
Word is spreading across our network, driving more adoption. AI-themed sessions at conferences were sparsely attended by advisors at the beginning of the year, and they were standing room only by the summer. The speed of the change is greater than I have seen in my career. So yes, we are at a tipping point. I’m excited to see where it goes from here.
DWN: How is Cambridge leveraging AI today? In what areas do you expect to utilize AI in the future?
CB: At Cambridge, we have embraced AI and are embedding it into our daily processes. We have partnered with some outside firms that have created AI solutions specifically for financial professionals, but we have also built an entire internal team that is tasked with developing, refining and implementing our AI strategy. We are in the midst of a major project to upgrade our advisor workstation. The timing worked out perfectly because it has allowed us to take advantage of all of this new technology.
We believe in flexibility and choice, so we don’t dictate the technology our affiliated professionals use. Instead, we allow them to access a full array of well-vetted tech solutions in addition to what’s offered in our preferred tech stack. This includes AI tools. Ensuring our professionals can run their practices as they see fit is part of our value proposition and is key to Cambridge’s long-term success.
DWN: Looking forward to 2025, what do you expect to be the most pressing issues facing technology executives in the wealth management industry? How are you preparing to address them now?
CB: AI will continue to dominate the tech discussion in 2025. We will have to see how the environment in Washington, D.C., affects regulations around these innovations.
Cybersecurity remains one of the most pressing issues for the industry. Between deepfakes and people impersonating clients, monitoring, protecting and mitigating against cyber-attacks just got more challenging in the age of AI-enabled bad actors. As an industry, we have to be able to ramp up security more than in the past. Ironically, AI-empowered tools can be used in this effort.
Data management is another issue. With client data in multiple silos and locations, securing it all is a complex undertaking. At Cambridge, we are in the process of moving our data to a central location. This consolidation will help us leverage our data for strategic business growth while protecting its integrity.
Third-party vendor management is also a growing concern for the industry, as more services and support are outsourced to third parties. To combat this issue, I’ve seen more firms narrow their tech stacks. This makes managing platforms, tools and systems more efficient for their IT departments, but at a cost to financial professionals. One of the benefits of our scale at Cambridge is that we have the staff to perform proper due diligence on tools and vendors our advisors want to use.
