EP1004: Why Wealth Firms Need More Than Technology

Deepak Dastrala, CEO, Purple Fabric, Intellect Design arena

As the Middle East prepares for a massive intergenerational wealth transfer and rising demand for personalised financial advice, wealth management firms are rethinking how they engage clients, empower relationship managers, and scale operations. Puja Sharma speaks with Deepak Dastrala, CEO, Purple Fabric, IDA, about the growing role of AI-driven intelligence in wealth management, the shift from technology-led to insight-led advisory models, and how firms can balance growth, productivity, trust, and compliance in an increasingly competitive landscape.

Transcript

SPEAKER_01 0:02

I'm Uja Sharma of IBS Intelligence, and you're listening to the IBS IVUs podcast. With me is Deepak Dasrala, Chief Technology Officer, Intellect AI at Intellect Design Arena. We are talking about invisible intelligence, visible wealth, why the Middle East trillion dollar wealth shift needs a platform that thinks with you. Welcome to the podcast, Deepak.

SPEAKER_00 0:24

Thank you, Pujat. Thank you for the time and opportunity.

SPEAKER_01 0:26

Deepak, what is changing in the Middle East wealth ecosystem and why will the next decade be different for wealth managers?

SPEAKER_00 0:34

I think if you see, right, I'm the Middle East is moving from wealth creation to the era of a wealth orchestration. Because for a very long time, like it kind of depended on the oil linked liquidity. But now if you see it's kind of reshaping itself into the sovereign wealth uh expansion, family office professionalism, uh professionalization, and the generational transfer. This is this is kind of a big change that is happening. And I think it's kind of a uh up there to grow like a probably a 30% in a year, right now it's close to trillion and it's expected to be 1.3 trillion. Uh that's a significant change when you look into right. I mean, this kind of a growth is unprecedented when you look into the any any market out there. But what is also happening is uh it is also having a very uh significant change in terms of an uh expectations, and uh what I really love about Middle East is they're very uh tech savvy and the forward-looking uh uh uh wealth clients. And I think based on the survey, it looks like a 71% of the clients expect uh their uh offerings to have an AI embedded within that kind of a thing. So, what does it mean is basically the expectation of a client's on how they want their relationship manager to advise and whom they want to work with, there is a significant uh change. So people don't typically look for the one who has a biggest balance sheet or a longest uh heritage or any of those things. They will look for the one who can really combine the relationship depth, which is still a very pivotal, with the kind of an intelligence speed and the transparency and the personalization at a scale. So this is a fundamentally very different game in terms of how uh the wealth uh is uh kind of getting into more of an orchestration and also the kind of a uh a service the the clients are expecting in the Middle East with the kind of a change that is happening out there uh from uh individually as well as uh from a technology perspective.

SPEAKER_01 2:40

Are wealth firms facing a technology gap today, or is it a deeper intelligence gap?

SPEAKER_00 2:45

It's an intelligence gap, Puja, and then the distinction is actually uh matters because most the banks and the the firms have already invested in the technology, whether it is a CRM or a portfolio system or a data lakes and leveraging a Gen A tools and so on and so forth, that's already there, that's happening. But the problem is not that the system don't exist, the problem is actually they don't actually think together, and that's where the distinction, they don't think together because the client goals sit in one place, portfolio exposure sit in another, market signal somewhere else. And the most valuable knowledge, what the advisor knows or a relationship manager knows about the client that sits in the head of an advisor. And I think this is actually a significant challenge that is uh that is causing. And this is where what happens is right, I mean, like a lot of uh investment has gone into the the digitization, but the really I think the people haven't thought through how they can actually bring this intelligence together. I I typically call it as a three kinds of an intelligence, which is which is uh uh basic, uh basically the test it, implicit and explicit. Uh, tacit is what uh what sits in the heads of the people, and uh implicit is what sits in the workflow of the systems, and explicit is uh uh basically what is clearly given as a documentation out there and all. I think uh unless this particular uh challenge is not solved, I think it's extremely important to really fill the uh the intelligence gap. So it's a clear intelligence gap, not a technology gap.

SPEAKER_01 4:21

Um what is a platform that things with the advisor actually looks like in practice?

SPEAKER_00 4:27

So I think let me uh make it very concrete, right? Because I know this phrase is uh uh heavily used, especially um after the A came into the picture, right? A lot of uh systems where uh the information is available, they fall into the two kinds of a category. What I call as a system of record, which is kind of a wealth platform, system of engagements, the CRMs and everything. But what is the missing layer is a what I call as a system of intelligence, which probably helps in terms of connecting these display systems, desperate data sources and everything, and actually helps the advisor in a near uh real time. Think about this as a more of a second brain of an uh an advisor or a relationship manager. So at every every juncture, whether when you're servicing a client, when you're onboarding a client, or when you're preparing for a meeting for a client, or probably when the client is looking for any any insights, it can help the advisor think proactively before and after. And so that literally kind of a second brain that really helps and constantly thinking on behalf of an advisor for the client and for the other stakeholders and help them to do the right thing. Because what matters in the intelligence era is a speed and the trust. So without this particular second brain, I think that will be very difficult. So that's that's what probably I call I call it as a uh a platform that thinks with the advisor.

SPEAKER_01 6:00

How can AI-driven intelligence translate into measurable gains like AUM growth, RM productivity, and client retention?

SPEAKER_00 6:08

I think it's very important, Puj. I think let's go straight into the the P and L part, right? Because this conversation typically right now is one of the biggest challenges. It remains vague. So to get to the very specific uh uh data point, right? One is the RM productivity. Still, the RM spends minimum 40% of the time in the admin tasks or the such kind of an activities and all. So this is where uh how the AI agents can work as a team and pretty much kind of an execute the complex workflows, which requires a lot of coordination, working across the multiple systems and all. I think if the if the agent is brought into the uh the operations layer, that gives easily the uh 25 to 40 percent of the uh kind of a gain in terms of the productivity, and that is the the times uh kind of saved. But also the uh AUM growth, the assets under management growth, right? One of the things is like a lot of people underestimate uh the amount of a untapped wallet that they are sitting on with their existing clients itself, and I think that actually contributes at least to the 15 to 20 percent, uh, if you really get that right. Uh now another probably the important area is a retaining the client. So, this is a actually, I would say, the most urgent one and the important one because there is an A native firms, A native advisors, and all of them are uh kind of are in a much better position to really uh capture. Because, again, as I said, right, the unlike the older world of where you have a uh current of a longest heritage, none of them matters because now what the people look for is can really someone can deliver the better value faster, cheaper, and much more smarter, because that's how the world is moving, it is becoming uh much more volatile than ever. I think that's where it's a very important and urgent one, and which is actually the uh the client retention. So these are the probably the metrics and all, right? And ultimately what matters for an organization, right? Basically, how many clients per RM or an advisor, and how much conversion is happening from an advice, and what is the violet share that you are able to tap, how much is the attrition rate that you are able to control, and what are the net new assets that you have to build? And it means everything you have to do it at an unprecedented uh pace because that's what the the AI can power uh and make it happen. So these are the I would call as like a four or five metrics that matters and that really contributes to both the top line and the bottom line, uh in AI-led wealth management, how can firm ensure trust, explainability, and compliance remain intact? I think uh if you see the wealth, right? Always the trust remained a very foundation of the uh the industry. But now, what is the important part is uh now with AI and everything that will get for that it's important to reimagine what the trust means and all. This is where, as a human from a relationship perspective, what is the trust that you can bring in? But now, because you are using an AI, right? Then what is the kind of a trust that you are bringing in the decisions that you are kind of recommending based on AI and everything and all? So, this is where now it's very important to really design the trust at a platform level, not as an added layer at it uh at a deployment of a platform kind of a thing. So it's like a the human trust, the relationship that you bring in. But the trust that you, for example, any recommendation that you are doing based on the platform leveraging the AI, right? You need to carry the full audit trail. What is your data lineage, what is the suitability checks that you have done, how your workflow looks like, what your model governance, do you have a human in loop for very consequential decisions and all? And all of that it is important to really prove it and make it very transparent to the uh the customer so that the customer knows that okay, the decisions are not opaque, and you have a governed intelligence in layer available that is actually uh supporting the human that is the basically the advisor he or she is accountable and all. So age-old relationship trust, but also the new age technology trust. But it but it should come across as a more of a governed intelligence uh that is trustworthy, where the people can make a decision worth of millions or billions, uh, matters more. So the trust has to be reimagined.

SPEAKER_01 10:31

Uh five years from now, will intelligence platform become the biggest differentiator in wealth management?

SPEAKER_00 10:37

Definitely, yes. And I think we are seeing it as some kind of an early science already, uh, Puja, because if you see some of the uh data out there from the Grand Dot and others, 73% of asset management just to execute now say they say AI is very critical to their organization's future. And understanding research shows that 60% of the clients globally expect their wealth manager to use AI. So already there are early signs, uh Puja, but the access of differentiation is shifting. It's like a balance sheet, brand heritage, uh, the products that they have, all of them will become a stable table stakes. Okay. Digital channels are expected to be uh kind of a standard uh out there. But what will become extremely uh uh different is basically how you have these particular platforms which can really help in terms of bringing the human intelligence as well as the uh the enterprise intelligence as well as the client intelligence, and really you can personalize the offering so that you are really and unfortunately, right? What probably holds good yesterday might not be good today, but how you'll be able to make some very critical decisions at a pace that is unprecedented, but also the governed intelligence to be a very central part of it. And this is all possible only when you can when you have a platform that really can do all of that at a pace that is unprecedented. So, what what will probably the thing is right now? You can see the whole next decade of wealth management in the Middle East, right? It will not be won by the firms that provide the that just digitize the advice, it will be won by the firms that make the advice more intelligent, more explainable, and more personal at a scale. So this is why I feel I feel like things will fundamentally change, and and uh probably the one who can do the things at a scale in a governed manner uh will probably make a bigger difference, uh future.

SPEAKER_01 12:41

We're talking about intelligence gap and uh how AI is just a facilitator, but we need humans in the loop, right? So, do you think human intervention will be moot in the future times when it comes to wealth managers?

SPEAKER_00 12:56

I think it will become much more important, but not necessarily in the current shape or form. For example, if you see, right, I I am I'm actually very close to the wealth management industry for the last 15 years, and I provide the technology to the one of the best firms out there. When I see what is common with these advisors, is actually after some point of a time, the most successful advisors they become a kind of a life coach for their client. So the advice will never be restricted to the just a one area or other area, they become a very integral part of their ecosystem of the client. So I see uh, and also the when something becomes a commodity and another thing will become a luxury. When pure advice will become a commodity, I think the life coaching will become an um uh a luxury. And I think slowly I feel a lot of these advisors will turn into the kind of a coaches within the thing because something else will become very complex, it will not be the current shape or form. What the advisor stands for, what the kind of a capabilities and the expertise that they bring, I think they'll get further enhanced. So I don't see the the role of human going away from the wealth management, but it will not be the current shape or form.

SPEAKER_01 14:11

Thank you so much for that insight, Deepak. Deepak Dasdrala, chief technology officer, intellect AI at intellect designer.