The Next AI Gold Rush May Be Compliance

AI notetakers and chatbots are taking over wealth management. The next frontier may be less glamorous.

Regulatory compliance could become the next battlefield for advisors and offer significant cost savings for firms, which often pay millions of dollars to comply with federal and state regulations, as well as industry rules, each year. Much of those expenses cover risk officers and compliance teams. The new tools would only add to AI’s already significant impact on financial services; the fintech market, which is rapidly incorporating AI into its services, is estimated to grow to more than $1 trillion by 2032. Platforms that draft emails, summarize meetings and take notes have cropped up left and right, and some firms have even launched their own chatbot LLMs to answer clients’ questions.

“Our industry as a whole is a little behind when it comes to AI, and that’s not a bad thing,” said Ryan Borer, managing partner of Advisor CRM. “AI meeting notetakers, meeting prep, that stuff caught on because it was so easy to adopt… There’s a lot of firms still focusing on that, but I think there are some other areas we’ll start to see more of an emphasis on.”

Compl(AI)nce

AI isn’t just expanding into other capabilities, like creating marketing materials from scratch and picking stocks. One of the latest firms to join the fray, Hamachi.ai, has a compliance bot that ensures everything it produces is in line with regulations imposed by the Securities and Exchange Commission and the Financial Industry Regulatory Authority, or FINRA. Hamachi.ai CEO Mike Wilson has worked at the convergence of tech and wealth for decades, helping bring PC-oriented firms to the web in the early 2000s. “We see a very similar type of transformation now, as the wealth management community starts to use AI in their practices,” Wilson said. “The future, in our opinion, belongs to firms that connect expertise with AI and compliance, and that do so with the ability to deliver personalized advice at scale.”

In the Hopper. One capability that may become crucial in coming years is an AI model that integrates data from numerous sources and minimizes what Borer calls “system hopping,” or using different tech platforms to perform different tasks. “We’ve got a CRM here, we’ve got our financial planning software here,” he said. “There’s certain points [where] data doesn’t flow correctly.” The solution, Borer added, is to implement either an all-in-one platform or an additional tech layer that sits on top of, and integrates, whatever platforms a firm already uses.

“There’s a lot of advisors frustrated by lack of integration in tech stacks,” Borer said. “We’re starting to really connect the dots.”