Lufax and iResearch Release White Paper on Levels of Intelligence in Wealth Management

SHANGHAI, July 10, 2019 /PRNewswire/ -- Lufax, a world-leading comprehensive online wealth management platform, teamed up with research firm iResearch to release a white paper on intelligent wealth management services and propose an industry standard on their levels of intelligence.

Intelligent wealth management services represent the next developmental stage in digital wealth management. In addition to the standard Know Your Customer (KYC) system, intelligent wealth management services often leverage artificial intelligence, big data, and machine learning to provide investors with smart, professional, and individualized financial services. Its raison d'être lies in the pain points of traditional and digital wealth management services, namely, the imbalance between supply and demand of investment advisory services, the variable quality and reliability of advices that rely on human intervention, the conflict of interest that may arise from service providers playing favoritism with products that come with more commission, and the dependence on investors' own expertise in making investment decisions.

The white paper provides an overview on the state of the intelligent wealth management sector, investigates the needs and opinions of its customers, and offers a look ahead at the sector's future developments.

Since its inception in 2016, China's intelligent wealth management sector has seen exponential growth. The sector's asset under management (AUM) grew from 2016's RMB 30.07 billion, to 2018's RMB 254.69 billion, and is expected to reach RMB 737.05 billion in 2022.

The tremendous growth, however, does not mean there are not lingering issues with the development of intelligent wealth management services. The white paper finds that 67.9% of service platforms only allow button-based or simple text-based interactions. 92.4% of investors report having had to transfer to human operators because the robotic systems could not understand them. The current coverage of intelligent wealth management services is only at 29.7%, while 78.1% of their recommendations do not match with investors' real needs.

The white paper proposes an industry standard on the levels of intelligence à la levels of autonomous driving. It names accurate KYC systems, financial capabilities, intention identification capabilities, interactive capabilities, and investor education capabilities as key drivers of the future developments of intelligent wealth management services. These capabilities converge in three customer-facing deliverables that the white paper uses to evaluate intelligence levels: interactive experience, risk matching, and investor education. The proposed classification system contains four levels based on these metrics: 1.0 automated wealth management responders, 2.0 robotic wealth management assistants, 3.0 intelligent wealth management interfaces, 4.0 intelligent wealth management ecosystems. Among them, Level 3.0 represents the current developmental stage of the leaders in the intelligent wealth management sector.

Interactive Experience

While most Level 1.0 automated responders and Level 2.0 robotic assistants offer only simple button-based choices, the white paper argues a truly intelligent Level 3.0 interface should have the ability to understand customer intentions and hold multiple rounds of conversation, anticipating individual needs and providing customized services accordingly.

An even higher rung of interactive experience facilitated by a Level 4.0 intelligent ecosystem, posits the white paper, will possess human-like capability to understand intentions and generate natural language across multiple rounds of conversation, cover virtually all known wealth management scenarios, and proactively render individualized services to solve or even preempt customer problems.

Risk Matching

Many Level 1.0 and 2.0 services lack risk matching or only provide very rudimentary risk matching through the use of a one-time questionnaire. The white paper suggests a Level 3.0 intelligent interface should caution its customers when they attempt to select products that do not match their risk profile, and help them make informed decisions on building their portfolio by taking into account their KYC information and the products in which they have already invested.

The white paper sees the next level of intelligence ecosystem feature precise, proper, and dynamic risk matching in real-time.

Investor Education

The white paper reports that a large number of Level 1.0 and 2.0 digital wealth management platforms only showcase basic product information. The classification considers a service to have reached Level 3.0 intelligence when it provides essential market analysis, offers information on asset allocation, product comparison, and wealth management, educates customers on basic wealth management knowledge, and keeps tabs on the underlying assets of held positions.

The white paper expects Level 4.0 intelligent ecosystems to allow for comprehensive market analysis, asset allocation, product information, wealth management information, and intelligent evaluation. They are also to tailor investor education based on individualized customer profiles, and provide real-time portfolio analysis and advice.

"The rise of artificial intelligence in wealth management has enabled Lufax to become nimbler and more user friendly," says Yongping Cui, Lufax COO. "As a leader in the intelligent wealth management sector, we will continue to fuel technological innovations that add value for our customers in their preferred way and at the appropriate time."

About Lufax

Lufax is a world-leading comprehensive online wealth management platform. The company leverages its global financial footprint and technological innovations in building its comprehensive risk management apparatus, and provides institutions, enterprises, and qualified investors with secure, professional, efficient services in financial transactions and information.

About iResearch

iResearch is a leading provider of online audience measurement and consumer insights in China. The company helps its clients to harness the power of the Internet with premium data products, analytics and consulting services, enabling them to better understand China's Internet sector and enhance profitability and competitiveness.

SOURCE Lufax