Wealth Management Firms Set to Double AI Budgets, Eyes on Personalisation & Compliance

By Gloria Methri

A recent survey by Wipro Limited has revealed a major shift in wealth management, with firms expected to more than double their AI budgets over the next few years.

The report, ‘AI in Wealth Management: Navigating an Evolving Data-Driven Landscape’, surveyed 100 executives across the U.S. and highlights how AI is reshaping the industry, signalling a future that increasingly prioritises personalised client experiences, enhanced decision-making, and regulatory readiness.

According to the report, the percentage of IT budgets allocated to AI among wealth management firms is projected to leap from 16% to 37% within the next three to five years. This strategic investment underscores a broader industry movement toward data-driven innovation to meet clients’ growing expectations and outperform competitors.

While every firm surveyed has already integrated some form of AI into its operations, only 44% have deployed it extensively. Among these extensive users, however, 73% report a competitive edge due to AI. Wealth management firms employing AI broadly are also leading the charge in revolutionising client engagement, with 65% expecting major AI-driven transformations in client relationship management in the next one to two years.

AI’s impact on decision-making and efficiency is apparent, with 77% of respondents citing improvements in decision-making through predictive analytics and 76% reporting operational gains. Notably, over half of the firms (53%) see risk management as a critical area disrupted by AI, followed closely by research and analysis (45%).

As Ritesh Talapatra, Vice President at Wipro, said, “AI offers wealth management firms a chance to innovate, stand out, and succeed in an increasingly competitive market.”

Talapatra emphasised the technology’s power to deliver customised financial guidance and better client satisfaction as firms face challenges such as fluctuating revenues, operational cost pressures, and rising client demands.

Challenges in AI Adoption: Skills Gap and Regulations

The report also highlights notable obstacles to AI adoption in wealth management. A significant skills gap has emerged, with 68% of firms underscoring the need for AI-specific training and talent acquisition. Additionally, compliance challenges loom large, as 62% of respondents cite a lack of clear regulatory guidance as a top concern. Over half of the firms (55%) flag regulatory hurdles, while 54% point to issues surrounding potential bias in AI outputs, which could affect both compliance and trust.

The growing regulatory scrutiny around AI is prompting firms to take a cautious yet proactive approach. “As firms embrace AI, regulatory scrutiny has intensified,” Talapatra continued. “Ensuring AI implementations are compliant, explainable, and trustworthy is essential for maintaining regulatory standards and client confidence.”

The report concludes by urging firms to look beyond the technology itself and consider AI as an enabler for reimagining wealth management. It emphasises fostering an organisational culture that actively embraces AI-driven innovation while prioritising regulatory compliance. With AI now poised to play a central role in wealth management, the industry is at a crucial juncture—one where firms that leverage AI intelligently will likely gain a competitive edge in a rapidly evolving market.