Executives claim that the emergence of AI-based systems presents significant prospects for financial services companies.
However, because asset managers handle sensitive data, they are subject to greater risk than other companies that deal with customers.
According to Zack Kass, a former head of business partnerships at OpenAI, AI systems may be more effective than humans in providing clients with an explanation of how recommendations like portfolio allocations or lending decisions were made.
He claimed that people struggle to articulate the unconscious prejudices that can influence such choices.
“AI ought to greatly improve that. The issue is that, if we’re not careful, it will only become worse,” Kass stated this week in Chicago during an investor conference organized by Morningstar, where the development of AI systems was a popular topic of conversation.
According to a number of investors and technology experts, AI will theoretically streamline a lot of repetitive chores like creating simpler portfolios or filling out compliance papers, giving financial professionals more time to concentrate on issues that call for deeper thought or human engagement.
“There are certain things that machines could handle, freeing up a financial adviser to spend more time helping their clients,” said Karen Zaya, a senior research analyst at Morningstar who monitors the use of technology by investment managers.
However, she added, there would be differences in the degree of human-AI interactions. The factors are far more complicated for things like setting up assets in a retirement plan, she said, even though AI-powered chatbots have grown standard for activities like helping to choose an airline seat or to check a bank account balance.
Laptops 1000“I don’t think that’s on the agenda for the industry right now,” Zaya stated.
“Every company we’ve spoken with is putting these ideas into practice with extreme consideration and caution.
They want to be given careful thought.”
In an effort to encourage inclusive and equal access to their services, US regulators are looking for public feedback on how financial institutions are using artificial intelligence.
This month, Treasury Secretary Janet Yellen issued a warning, stating that while AI could reduce transaction costs in the financial sector, it also carries “significant risks.”
