Editor's note: Rob Seidman started his career as a financial engineer at Algorithmics, a financial risk management company that was one of the first major FinTech firms, established over 30 years ago. The company was acquired by IBM in 2011, and Seidman was present pre- and post-acquisition. After leaving IBM in 2013, Rob worked as a quantitative strategist at Quantifi and later as a senior presales consultant for S&P Capital IQ. In March 2016, Seidman returned to IBM. His responsibilities are split between development, product management, and sales to bring financial services solutions to the cloud. He previously spoke with us about whether wealth management firms should do cybersecurity.

A change in wealth management is coming. At the moment, people who are 30–40 years old are beginning to have investments on their minds. In response to demand from customers and the market, wealth management platforms try to adapt, but their hands are tied with the need to maintain infrastructure and security.

Artificial intelligence, chatbots, and great user experience (UX) are almost here. But first, the infrastructure should become cheap and accessible to all.

Chatbots Are The Future Of Finance

AI has proved that raw data processing allows wealth tech companies to get valuable insights. It can reduce the time it takes to do things like processing huge numbers of news articles to intercept market triggers. It’s not always possible to automate a number of pieces of that workflow in a meaningful way, whether it’s just not feasible or cost effective. That’s why Seidman is sure that AI isn’t going to replace advisors wholesale in their current jobs. Despite that, there’s a lot of value in natural language processing in wealth management practice.

“There’s been a real, exponential change in the way that one can communicate with chatbots and conversational agents in the last few years. I don’t necessarily think that’s going to subsume the entire agent-client relationship, but I do think that as individuals —especially the younger generations— are more innately connected to devices and prefer to communicate via text instead of phone call, ways of facilitating that are going to rise to prominence.”

Also, some processes could be automated and made better, but people still want to talk to people, especially while making complex decisions. The objective should be to equip those people with tools to make the conversation more productive.

“Anecdotally, an ultra-high-net-worth client may come in and say, ‘What happens to my portfolio if…?’. Recent innovations afford them the ability to get an actual quantitative answer in a way that can be articulated to you, even if neither client nor agent are quantitative people. The challenge is to find some solutions around the way that information is communicated to clients.”

Do Millennials Deserve Special Treatment?

The topic of millennials in finance speaks to a big argument going on right now. They require financial advice provided in a certain way, but they don’t have enough wealth. A part of that generation, Seidman comments that one thing needed is differentiation—a craft portfolio. Millennials want everything they get to tell a story.

“[Millennials] are going to want their own personal preferences to be reflected in their portfolio; they aren’t going to want cookie-cutter offerings anymore.”

So, the biggest question is, when should financial advisors start targeting millennials? Approaching them now is costly, and it’s difficult to estimate the ROI on that investment. Will they choose startups dedicated to their demographic or just come into reliable ones as soon as their wealth grows? If not targeted now, perhaps it will turn out to be too late when they accumulate capital? These are the answers that wealth management companies are still going to have to find.

Infrastructure Is A Primary Trend

Today, investors, including millennials, value great designs that enhance the user experience (UX). The market has both performance-focused and UX-focused offerings. Seidman believes these two aren’t mutually exclusive, but it’s best when both focuses coexist in a product because even separately they will have great prospects for the market.

“There’s a different kind of client that’s interested in each use case. Some don’t have a preference. Some just want the lowest cost for advice. Some are motivated by a user experience. I think there’ll be room for firms that choose on both ends.”

No matter what one is going to build, the product will need infrastructure that is both secure and highly available. Companies that minimize resources on infrastructure maintenance will be able to invest more into building unique features and keeping the focus of their choice.

“You may not want to spend the money maintaining your own grid; running artificial intelligence or large Monte Carlo simulations are very expensive to do. So it makes a lot of sense to rely on inexpensive, commoditized infrastructure.”

The Bottom Line

Infrastructure is an essential part of any kind of product, regardless of its focus and/or demographics. Because providing accounts and data security is a number-one task for every WealthTech company, cheap and commoditized solutions will be moving toward that trend.

Interviewed by Vasyl Soloshchuk, CEO and co-owner at INSART, FinTech engineering company. Vasyl is also the author of WealthTech Club, which conducts research into Fortune and Startup Robo-advisor and Wealth Management companies in terms of the technology ecosystem.