AI Strategies for Banks to Drive Growth and Enhance Client Relationships

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Samantha Davison: Hello and welcome to The Growth Studio. I'm your host, Samantha Davison. On The Growth Studio, we explore the latest in wealth management, diving into industry trends, challenges, and opportunities shaping the future. You'll hear from TIFIN AG's leaders, partners, industry experts, and clients who will share their successes and the transformative role AI has played in their journey. Together we'll uncover actionable insights, strategies, and the big ideas driving growth in the wealth management space.

Today we're focusing on the transformative journey of TIFIN AG's partnership with SEI, exploring how we're solving complex challenges for banks, enhancing client engagement, and driving organic growth. Our guest is Allie Carey, Chief Strategy Officer for SEI Private Banking and Wealth Management. Thanks so much for being here.

Allie Carey: Oh, Samantha, thank you so much for having me. I'm so excited to be here with you.

Samantha Davison: Well, Allie, you have had an impressive career, spanning strategic planning, product management, and driving growth initiatives, really across different sectors. How has your experience shaped your approach to defining growth strategies, especially in the wealth management space?

Allie Carey: It's so interesting. I was actually reflecting on this, probably about a couple weeks ago. And honestly, one thing that's been so center to my career across all of those different disciplines is the focus in on the end consumer. So, I started my career in sales. I was selling asset management products to financial advisors, and very quickly I got exposure to the impact-good and bad-that those products have on investors, on the advisor's client. And that really started to drive my approach when it came to selling those different products, putting the client at the center.

When I moved into product management, I was focused on delivering client experiences for advisors and investors. And again, that same thread came through. An experience can deliver functionality, but if it's not usable, if it's not intuitive for that end customer, it's not actually going to solve the problem.

So when I think about today, in my role and driving growth strategies, setting out growth plans for our business, it's really focused in on solving the problem for the end consumer. Because that's who we're all rallying around in the wealth management industry; it's creating impact there. And if we can't see that all the way through, our ability to meet our goals as a business and growing the business is going to be very, very difficult. So that's really the core of what I've been able to focus on in my career through all of those different disciplines, I guess you could say, that I've had the privilege of working in.

Samantha Davison: Well, and one of the things that is really making a difference really in all parts of our lives is artificial intelligence. And really, consumers, the client-they are using AI in everything they do. So let's focus on that now. So, AI is really helping, one thing, it's helping to address inefficiencies in traditional banking and create a more personalized approach to advice. Because as an end consumer, a client, I want the bank, the financial advisor, to be really talking to me and my needs. Can you share some examples of how SEI is using AI?

Allie Carey: Yeah, sure. So first I think the biggest thing with AI, to your point Samantha, is it is everywhere. Whether we know it or not, whether we know we're interacting with AI or not. You can think about different things in our life, like a Netflix experience, or an Instagram, social media. That's all machine learning and AI behind those experiences. It's not necessarily generative, which is getting all of the headlines today. So you're spot on, it's everywhere.

The biggest thing is it's really changing expectations from the consumer. There's so much more personalization and access to the information you need at the time that you don't even know you need it, because it's so strong. So, from an SEI perspective, really leaning into the fact that we're a company of 5,600 consumers. All of the employees are consumers. So we are embracing AI here. We're not turning off access to it.

We want our employees to utilize AI in their everyday life. Another step we've taken to really bolster that is setting up our Artificial Intelligence Center of Excellence. So this is for employees that want to learn more, want to engage in projects here at SEI, and experiments here at SEI, on applying artificial intelligence or machine learning to real-life use cases on the ground at the company. And we did that. I think it was the beginning of 2023, we set that up. It's led by our Head of Data Science, Vlad Coric, and he's really cultivated this community of employees, where we are providing education and opportunity to apply AI. We just recently announced, we launched our SEIGPT, where we're applying it to use cases specifically to bolster and augment our employees' experience to gain efficiencies. So if you think of things like client service, really providing them tools that will eliminate time from a research perspective, so that they can get answers back to clients faster.

There's also opportunities where we've built knowledge bases that AI is sitting on top of to help our sales teams when it comes to RFPs, and being able to get to completing those things faster, so that we can actually layer on that human view to tailor it, and spend more time focused on getting the best answer out rather than going across the organization trying to find the technical parts to put into the answer, if that makes sense. So those are two specific use cases that we're using AI for internally. And really again, it gets back to putting the client at the center. Right now, it's focused on efficiency here at SEI, so that we can get our clients faster answers, better service, that's tailored to them in their business.

Samantha Davison: Well, and I'm so glad that you mentioned that AI is helping to enhance what you're already delivering. You're not replacing somebody, but you're enhancing what we're delivering and creating those efficiencies.

How important is it to have the tools and really the right mindset when implementing AI? Sometimes, not having a top-down process or buy-in can actually hinder the success and the benefits of using AI. Can you talk to us about the unique challenges that you're seeing in the banking space?

Allie Carey: Yeah. Well, just like with any technology, I think we are a couple generations into these technologies that come out and really change the world. We had the internet, and the PC, and the mobile phone…so AI is that next generation. And focusing in on the business problem that needs to be solved and anchoring there, is so important, and not focusing on let's just use some really cool technology. Because then you'll miss the mark again with that end customer. So in the banking space specifically, the interesting thing about banks is they're in actually so many different businesses. You have your wealth business, you have your retail banking, you have your lending, you have your commercial, with different clients across all of those, and each presenting different business challenges that can be applied.

But like wealth management, in the other banking verticals, you're processing a lot of data. You have a lot of operational lift to deliver the best service. So there's a lot of opportunity in the bank space to create efficiencies to help augment employees, so that they can scale themselves to be able to do more in less time. And then also getting smarter as an organization. So if you're able to pull your data together and overlay either machine learning or AI on top of that, the business intelligence that you can gain to then set growth strategy, it can be quite game-changing.

Samantha Davison: Let's talk now about the TIFIN AG and SEI partnership. I know that we've been working together to solve the organic bank challenges, but what would you say are the biggest challenges in the banking industry?

Allie Carey: Yeah, there's just so many, and you can look at it either way, a challenge or an opportunity. So it's really like the lens in which you look at it.

Samantha Davison: Glass half full, glass half empty.

Allie Carey: Spot on. So, ever since, especially since SVB and March of 2023 and all of the challenges that came, especially for that regional and community space and the pressures on balance sheets that a lot of these banks have felt, I think that's really elevated wealth management as a really good strong business for banks to lean into. It's a fee revenue business. It's an off balance sheet business so that there's much more stability for the bank in that revenue stream.

So how can banks double down on growing that business? And really, banks have a strategic advantage when it comes to the client base across the other verticals in a bank. I think the industry number is there's maybe a 2 to 4% representation of retail, commercial, whatever, lending bank clients in wealth management. So how can banks really focus in on that strategic advantage they have of that client base and cross-selling them into wealth management?

Your wealth management business does an amazing job for business owners. Partnering with your commercial bank is something that I'm sure a lot of banks are trying to figure out. You got to align incentives, there's some cultural things there, as well as technology support. And that's actually something where I think TIFIN AG is really stepping in and can help banks solve that problem.

Samantha Davison: And are there lessons that you have learned from your journey with AI and maybe even with TIFIN that you think other banks could benefit from? You mentioned examples of how SEI is using AI, but I wonder if there are some lessons that you've learned that would be helpful.

Allie Carey: Yeah, I think, well, one, the journey is still going. And I would argue we're still very early on in the journey, all of us, of what AI can really bring to the table. So, as far as lessons that we've learned so far, I do think this is an important one, and I said it earlier, focusing in and identifying the business problem and making sure that that's the center of what you're trying to solve. And not just doing AI for the sake of AI.

I think banks, especially because they're so trusted by their clients across the organization, there's definitely making sure that you're partnering with your legal, your compliance, and any of those internal groups that are there to really make sure that data is secure and things are done correctly from a regulatory standpoint, because that's an important part of what banks do. They're so trusted by their clients, they need to maintain that, and it's a partnership there. So establishing and making sure that internal partnership is set up is something that I think at SEI, we've done really well. And we would be hitting a lot more roadblocks now if we hadn't really internally committed to that partnership.

And then the next piece that we've learned, especially at SEI, as a large-scaled organization across financial services, and many of the banks are large and scaled themselves, is finding partners that can move really fast. Because SEI, for all the right reasons, is not going to be able to keep up with the pace that AI is moving at. We have a client base we need to care for. We have different systems that we're going to need to manage and regulators that we need to answer to. So setting up partnerships like with TIFIN, where the flexibility, and the nimbleness, and the focus that the partner can bring to the table on solving those key problems, that's where I think real change will happen in the industry that will end up helping that end customer.

Samantha Davison: We've talked here at TIFIN AG just about how we have the expertise, the data science expertise, the people that really know that tech. And then we also have the people that really understand the wealth management industry, the challenges that advisors face on a regular basis. And so to marry those two at TIFIN AG to solve real problems and the real organic growth problems is kind of exciting to be part of, to be honest. So I'm glad that you recognize that the value or the importance of partnerships. I know we also say sometimes, firms will say, "OK, do we do it ourselves? Do we buy it? Or do we partner?" And it feels like from what you're saying is partnerships is really the way to go.

Allie Carey: Yes. And I do think that partnerships are starting to reach a place in the industry where they're just so much more fruitful than they have been in the past. And there's recognition across industry players of, "this is our expertise, this is the strategic value we can bring to a partnership, and we need to lean into others and the value that they can bring." And it truly creates a one plus one equals three situation. And it doesn't necessarily require the large risk, and I'll say risk that an acquisition presents. Because you're getting married, very much getting married. And there's a huge capital outlay that's required there in integrations of people and process and technology. A lot of times that elongates the timeline before you can see that value. Whereas partnerships, you can get there faster, and co-create a lot of times faster as well.

Samantha Davison: And you just want to make sure you find the right partner, like in a marriage. Right?

Allie Carey: It's so true. It's so true. And that's where culture makes such a huge difference. And I think that's one thing with TIFIN and SEI that was very clear from the beginning, when we announced the greater partnership in February, is the cultural match between the two organizations really lays a great foundation for being able to solve problems for the industry, develop new solutions for the industry, and share knowledge across. And even allowing employees to kind of move between the organizations and learn what it's like to work at TIFIN in a very fast-paced, AI-centric wealth management incubator versus an SEI-a 56-year incumbent that's scaled in a public company, right? They're different worlds.

Samantha Davison: But a great, great combination right now. So SEI's approach to experimentation and innovation really is helping set it apart from competitors. What role do you see AI playing in the evolution of banking, specifically, and wealth management over the say next five to 10 years?

Allie Carey: So I think that we're going to see a lot of…what's the word I'm looking for? A lot of integration of banking and wealth. The experience in seven years, say, is not going to be, "I have a banking relationship, and I have a wealth relationship." And traditionally, those have been thought of as very separate. I think what we're going to really start to experience is the delivery of financial services to a consumer. Whether that be a wealth management or a banking service, it will all be in one. Similar to what the private banks or even the family offices are able to create for the ultra-high-net-worth, we're going to start to see that come down market, and AI is going to be a key enabler for that. Because it will be able to identify opportunities, provide some advice with human augmentation on the best way to not only grow assets, but even manage debt-how to play those things off of each other, so that you're making the smartest decision for your money with the goals that you have. I mean, we're even seeing now AI start to automate personal finance, paying bills.

Samantha Davison: Personalization is so very important.

Allie Carey: Exactly. When should I pay this credit card? Do I pay them evenly? Do I pay them one down first, then the other? So there's companies starting to pop up using AI to automate that. So someone's not having to think about it. An advisor can kind of really scale themselves all the way down into budget, and really enacting that budget, and then bring that client up the service spectrum as they start to build wealth and beyond. So, it's very interesting. I'm really excited. I'm starting to see some of these companies pop up really focused in on AI and the combination of banking and wealth. I don't think we're going to talk about them separately anymore, like seven years from now.

Samantha Davison: Alright, so before we wrap, similar question but a little different. If you could make one prediction about the future of AI in our industry, what would that be?

Allie Carey: One prediction. So this is a little bit of a brainchild of mine. But I call it autonomous wealth. And it kind of piggybacks on what I was talking about earlier around automating personal finance. I think we'll be able to verbalize or tell a person or an AI what our financial goals are. And I think that program will be able to set up a wealth plan and implement it, and manage it completely autonomously. So, we're not having to make decisions as our life changes. It will be able to understand, "Oh, they got married, or she got married. Let's try and set this up. Here are the key decisions I need from her, but then I can go do that and it will be on its way."

Think about how we have autonomous driving. So you buy the vehicle, you sit in the vehicle, you can turn it off, you can turn it on, but it can drive the car without you doing a thing. I wouldn't be surprised if we get to a place where wealth management is done that way.

Samantha Davison: Well, and I imagine that while doing that, it's also enabling the financial or enhancing the financial futures of more people. It's bringing better financial futures or opportunities to more people that wouldn't otherwise have it.

Allie Carey: Yes, a hundred percent. And the other part of that too, is that it elevates that financial advisor to be more of a life manager. And some of the best financial advisors are already doing this for their clients. They're managing different parts of their life to almost…like in an outsourced fashion for the person. I sometimes talk about and make the analogy to entertainers or famous people, how they have managers that manage the different parts of their career and their life. I think financial advisors will be elevated to that level because so much will be done by AI with somebody kind of overseeing it.

Samantha Davison: Yeah, and I've heard advisors say, "Sometimes I'm the first phone call a client will make." It may be even before their spouse. So I imagine with AI, it's going to be even more enhanced. The relationship will be that much deeper.

Allie Carey: Yeah, it will. They'll have more information quicker at their fingertips to have that conversation in the moment when it matters, not at the quarterly meeting or the annual meeting. There'll be something that the advisor is able to get, like an alert or something like, "Hey, this is going on. You might want to call this client. It looks like they bought a house, or it looks like they had a large healthcare expense." Maybe they got a diagnosis. A lot of this data will be available as these systems start to get stitched together, creating that next level of transparency.

Samantha Davison: Yeah, that's great. Well, Allie, thank you so much for your time and your insights. I hope you enjoyed it as much as I did.

Allie Carey: Yes, I had a great time. Samantha. Thank you so much.

Samantha Davison: And thank you, of course, for your partnership with TIFIN and TIFIN AG.

Now to our listeners, thank you so much for tuning into this episode of The Growth Studio. We hope you enjoyed our conversation with Allie. If you found today's discussion helpful, we'll be back next month with more expert insights, compelling stories, and practical strategies to help you stay ahead in the ever- evolving wealth management landscape. Until next time, I'm Samantha Davison and this is The Growth Studio. Thanks for listening and let's keep growing together.

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