Navigating the future: AI's impact on wealth management firms
In recent months, the financial services industry has witnessed significant advancements in artificial intelligence (AI), sparking both excitement and apprehension amongst wealth managers. While the potential benefits of AI are undeniable, the wealth management sector has been understandably cautious in embracing this transformative technology. This hesitation can be attributed to several factors, including a prioritisation of addressing critical gaps in services, concerns about client relationships, and the unique needs of different market segments.
In this blog, we explore the hopes and fears of integrating AI in wealth management, balancing the potential savings and efficiencies that can come from technological advancement alongside the concerns over an erosion of personalised client services.
Back office transformation
The potential for improved efficiency through AI and machine learning is substantial, particularly in areas like automating trade settlements, automating regulatory compliance, and risk management.
However, within the technology function of many wealth management firms, the primary focus often relates to implementing new traditional services and upgrades to address key operational gaps. Implementing non-AI solutions to enhance services such as regulatory compliance, Environmental, Social, and Governance (ESG), Customer Relationship Management (CRM), and digital services are typically considered more important and lower risk.
Because of the potentially significant benefits and the remarkable pace of change in AI, we believe that wealth management firms should put aside time and budget in 2024 to carefully evaluate the potential efficiencies and cost savings offered by AI, balancing these against the benefits of their current project portfolio. This assessment will help determine if prioritising AI integration is a strategic move that aligns with their operational goals.
Front office dilemma
We are starting to see the emergence of more AI-powered tools that can transform the front office experience for wealth managers and their clients. Early adoption of these innovations has the potential to allow client advisors and relationship managers to better serve “mass affluent” clients. Use of AI in this environment could combine the advantages of a human-led personalised service and advisor judgement with the scalability and insights that AI can provide.
However, implementation of AI in the front office remains a challenge. Securing funding to develop new AI capabilities requires proof of value to the organisation and clients. Wealth managers must also weigh up the benefits against factors such as data and integration challenges, evolving financial services regulations for AI, and the perceived lack of trust from clients in insights generated from AI.
Industry evolution
We believe a small number of early adopting wealth managers armed with AI capabilities are likely to start disrupting the industry at some point in the next year. Developing a strategy, plan, and business case for AI integration is important to avoid being left too far behind.
Key considerations
- Early adoption dilemma: The decision to be an early mover or a follower with respect to AI in the wealth management market needs careful consideration of the associated risks and rewards.
- Barriers to progress: For those who decide to invest in AI, there are some foundational elements that could act as barriers to AI progress if not addressed:
- Data governance and quality: Building a foundation of sound data governance and ensuring data quality is imperative for effective AI implementation. This discipline is important in any organisation but vital to get the best out of AI solutions.
- Robust data infrastructure: Modern platforms with adaptability to change swiftly are most suitable to form the backbone of successful AI integration.
- Skilled resources: The availability of appropriately skilled individuals is critical for navigating the complexities of enterprise AI.
Conclusion
As the wealth management sector contemplates the role of AI, a delicate balance must be struck between embracing innovation and preserving the personal touch that defines many client relationships. While challenges exist, we believe that the potential rewards in terms of cost savings, productivity gains, and enhanced client experiences will make the journey towards AI integration worthwhile. Wealth managers should consider their strategy for when and how to look at the opportunities that AI can provide for them to ensure that they don’t fall behind their competitors.
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Aziz Yuldashev
Senior Consultant
+44 (0)1653 628596
Aziz has 12 years of experience in international relations and diplomacy before his consulting career. He gained his strategy, stakeholder management, operations and change management expertise while performing his duties at the Ministry of Foreign Affairs of Uzbekistan, the Embassy in Singapore and the UN office.
Aziz holds an MBA from the Alliance Manchester Business School, the University of Manchester. He is interested and enjoys solving complicated and challenging issues with clients by delivering well-structured, innovative and efficient solutions that bring long-term lucrative outcomes.
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Edward Hunt
Analyst
+44 (0)1653 628596
Edward is an emerging professional with a growing track record of success in supporting operational efficiency and procurement projects. By combining his understanding of business fundamentals with proficiency in data analysis, he supports clients by extracting valuable insights that drive informed decision-making.
Prior to joining Curzon, he specialised in the audit of financial services companies at a leading accounting firm. His background in audit has equipped him with an understanding of the regulatory landscape and the ability to assess internal controls and recommend enhancements to mitigate risk.
Edward holds a BSc in Accounting and Finance from the London School of Economics.
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Driving Strategic Impact: A Curzon Consulting Guide to Procurement Excellence
As management consultants, we help clients achieve substantial cost savings and efficiencies through procurement transformations. But truly effective transformations require surmounting common challenges like limited spend visibility and stakeholder alignment.
Based on a recent engagement delivering over £5M in savings, here are our proven tips for procurement transformation success:
Optimise spend visibility
Robust spend analysis is crucial. Categorise expenditures and pinpoint top suppliers and contracts per category. Without clean baseline data, it’s impossible to identify savings levers. Advanced analytics and mining uncover hidden insights, while stakeholder interviews provide a qualitative context.
Benchmark and identify gaps
Benchmark pricing and performance versus industry best practices to reveal overpayment. Consolidate volumes for improved leverage. Deep supply market analysis uncovers alternative vendors and guides negotiations.
Strategise and priortise
Conduct opportunity assessments to inform transformation planning. Develop tailored category-specific sourcing strategies. Model potential savings scenarios and sequence initiatives based on impact, effort, and stakeholder readiness.
Secure stakeholder alignment
Amidst change, align stakeholders through clear communication and early buy-in. Identify key decision-makers and influencers. Educate on best practices and projected bottom-line impact. Procurement must shed its tactical image and be seen as a strategic function driving millions in bottom-line impact.
Relentlessly implement
With the strategy set, focus intensely on implementation. Maintain discipline in negotiations while preserving supplier relationships. Enforce contract compliance and tail spend management.
Continuously improve
Sustaining change requires continuous improvement. Redesign operating models, policies, KPIs, training, and integrate new tech and ways of working. Build analytics to monitor savings and flag waste recurrence. Institutionalising change is the hallmark of procurement leaders.
After meeting our cost-savings goals, we leveraged our award-winning assessment framework to ensure the procurement organisation’s long-term success. Our framework evaluates Procurement across five dimensions: People, Strategy, Systems, Governance, and Management. This data-driven approach identified gaps and enabled us to strategise implementing best practices. Ultimately, these steps addressed challenges, so the procurement organisation can expand its influence and be viewed as a strategic partner across all business units.
In conclusion
As trusted consultants, we overcome inertia and silos to deliver rapid yet lasting transformation. With deep expertise and cross-industry perspective, we objectively assess opportunities, align stakeholders, and implement best practices. The result is simplified sourcing, lower costs, reduced risks, increased efficiency, and strategic impact.
Let us conduct an initial diagnostic for your procurement organisation. We will benchmark performance, identify savings levers, and provide a roadmap to deliver value.
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Preetesh Sood
Consultant
Preetesh is a management consultant and technology expert with over 6 years of experience driving digital transformation and innovation initiatives at global corporations. He began his career at Cisco Systems, where he managed the development and delivery of smart manufacturing solutions. By spearheading the global synchronisation of smart manufacturing platforms, Preetesh enabled significant cost savings through operational efficiency.
Most recently, Preetesh worked as a consultant supporting executive leadership across industries, including technology, financial services, and not-for-profit. He led market research, performed statistical analyses, and identified strategic partnerships to enable successful market entry strategies. Preetesh also created valuation models for sustainable investment products and supported the development of go-to-market plans.
With an MBA from the University of Manchester, and a Bachelor’s in Computer Science Engineering, Preetesh brings a data-driven yet pragmatic approach to consulting projects. He leverages his expertise in data analytics, machine learning and technology to drive organisational transformation and inform executive decisions. Preetesh is passionate about innovation and holds certifications in leadership and communication. In his free time, Preetesh enjoys reading on current geo-political affairs, and watching Formula 1 and cricket.
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UK’s Leading Management Consultants 2023
We are delighted to have been recognised for the sixth consecutive year as one of the ‘UK’s Leading Management Consultants 2023’ by the Financial Times.
Recommended across 8 categories and with a Gold Award for the 2nd consecutive year, the annual rating, compiled with data company Statista is based on endorsements by clients and peers. It demonstrates our consistent year-on-year sector and service line growth.
Consulting companies are awarded Bronze (recommended), Silver (frequently recommended) or Gold (very frequently recommended).
Sectoral expertise
- Construction & Infrastructure – Gold
- Healthcare – Silver
- Financial Services – Bronze
- Public & Social Sector – Bronze
Consulting services
- Digital Transformation – Silver
- Operations & Supply Chain – Silver
- Strategy – Silver
- Sustainability – Silver
Managing Partner Andrew Morgan said
We are absolutely delighted to see the continued and consistent progression of Curzon. I am so proud of the team, as this emphasises their commitment and dedication to deliver sustainable, tangible results for our clients through strategic, operational and transformation delivery.
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2022 MCA Awards Winners
We are so very proud to announce #CurzonConsulting, has won the Commercial Impact #mcaawards 2022 award, with #RamsayHeathCare. Representing the very best of our consulting business, it’s such an incredible achievement to be recognised for our Procurement Transformation Programme. The judges said this was a team that: “brought specific expertise to a problem and rebuilt the procurement capability at speed, changing hearts and minds in the organisation.”
Established by the Management Consultancies Association, the representative body for the UK’s leading management consulting firms, the #MCAAwards demonstrate the transformational work the sector has undertaken during the last challenging twelve months.
The remarkable achievement marks the eight consecutive years that Curzon Consulting has been a finalist at these prestigious awards.
Commercial Impact: Procurement Transformation Programme with Ramsay Health Care UK
Ramsay Group operates a global network of 530+ healthcare facilities across 11 countries.
The pandemic exposed an over-reliance on a ‘single’ income source. With all elective activity (e.g., joint replacements, cataracts), the primary income source, halted overnight, but a high fixed cost base remained.
As a response, Ramsay UK embarked on an ambitious growth & efficiency programme. Curzon was engaged to design and deliver a Procurement Transformation programme.
Over 9 months, we took a pragmatic, agile and “together” approach to accelerate benefit delivery, particularly in high spend / high complex clinical spend categories.
By assessing the existing PO against a methodical and objective review against 8 dimensions we highlighted several data-driven insights; fundamentally, the PO only managed 44% of total spend; hence lack of PO involvement resulted in suboptimal category /supplier management and savings delivery.
Improvement opportunities were incorporated into the design of the new Procurement Organisation.
Our methodology was specifically adapted to address demand-side cost optimisation levers.
Through a deep dive into orthopaedics, a key benefit delivered in Orthopaedics came from ensuring the Surgeon selected the appropriate implant system (metal or ceramic) to match the patient’s profile (e.g., age, gender).
A well-established norm in Orthopaedics is to routinely implant, high quality, lower-cost metal vs. ceramic hip systems into >70-year-old patients. Our analysis showed Surgeons at Ramsay UK implanted costly ceramic hip systems in 33% of >70-year-old NHS patients. The NHS reimbursement for a complete hip replacement is fixed, so every incremental switch from ceramic to metal impacted the bottom line.
Surgeons had little comprehension of how their hip selection decisions impacted Ramsay UK’s profitability. Our insights directly influenced the Orthopaedic Steering Group’s new policy which required Surgeons to utilise lower-cost metal hip systems in older NHS patients.
Curzon established an open, trusted, and collaborative way of working with the Ramsay team, and by adopting a “one team” approach with the PO we ensured everyone involved with the procurement transformation owned the outcome and maximised the benefits from knowledge transfer during Wave 1.
Fundamentally a key part of the relationship was to ensure recommendations on cost improvement would not compromise clinical outcomes and patient satisfaction.
Wave 1 has delivered £multi-millions in incremental annualised savings. In addition, the savings have translated into several £100 million worth of shareholder value.
Commenting on the success – Ramsay Health’s CFO Peter Allen said:
“Curzon helped us obtain the confidence and operational ‘can-do’ to drive incremental savings sooner than we could have expected, and then to push on to best practice performance.
Their skill was in balancing pace of change and the results imperative with the need to take the organisation with them on the journey. A key achievement was building the necessary collaboration between the many functions that needed to act together to drive benefits in complex clinical spend categories.
Curzon’s strong analytical expertise, and ability help us to take a critical view on the “art of the possible” and bring the team along on the journey to demonstrate benefits delivery was a critical success factor.
The result was a tangible and ongoing commercial win, and a new Procurement Organisation to drive cost leadership, profitability and sustainability going forward”
A massive congratulations to the Curzon Consulting team and Ramsay Health Care UK and the other finalists.
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Catherine Fleming
Head of HR & Consultancy Operations
+44 (0)1653 628596
Catherine has held multiple roles within the people profession and in various industries ranging from IT to recruitment and fire safety. Before moving into HR, she had a career in general management where she managed commercial sales, operations and coached and mentored large teams. Her background has helped inform and shape her approach to human resources and she is passionate about doing HR differently and creating the right environment where people and therefore companies, can flourish.
Key strength areas include talent acquisition, employee engagement and performance management with each element being very much driven by a focus to create a great experience.
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Amber-Valetta Nunes
Consultant
+44 (0)1653 628596
Amber-Valetta is a consultant with 2 years’ experience in consulting split between design and management consulting.; her experience lies in the defense and manufacturing sectors. Having worked extensively on cutting-edge technologies Amber-Valetta has expertise in data analysis, continuous improvement activities and health and safety.
Amber-Valetta has a Master of Engineering (MEng) in Chemical Engineering from the University of Surrey where she also undertook a placement year in a global pharmaceutical company. She has a passion for sustainability and since graduating Amber-Valetta has also completed a postgraduate certification (PGCert) in the principles of Hydrogen Safety and Hydrogen Safety Technologies.
She uses her technical and creative skills to design and implement new and exciting solutions for the multi-faceted challenges that arise across the various sectors in the consulting industry.
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CIPS Awards Winners
Last night at the CIPS Excellence in Procurement Awards, we won “Best Procurement Consultancy Project of the Year” for our collaboration with Ramsay Health Care UK.
Congratulations to both teams!
Procurement Transformation Programme with Ramsay Health Care UK
As a pandemic response, Ramsay UK embarked on an ambitious growth & efficiency programme. Curzon designed and delivered a substantial cost reduction and Procurement Transformation programme.
Over 9 months, we defined a pragmatic and agile approach to implementing a best-in-class procurement organisation with an increased mandate, able to accelerate benefit delivery, and manage high spend / high complex clinical spend categories.
We helped Ramsay UK to deliver £multi-millions in incremental annualised savings. In addition, the savings have translated into several £100 million worth of shareholder value.
View the full case here – https://www.curzonconsulting.com/procurement-consultancy-project-of-the-year-ramsay-healthcare/