Lawmakers, tech experts sound alarm over artificial intelligence's potential dangers
Kara Frederick, tech director at the Heritage Foundation, discusses the need for regulations on artificial intelligence as lawmakers and tech titans discuss the potential risks.
Despite the challenges it faces, the financial sector stands to benefit greatly from artificial intelligence (AI) integration.
In terms of technology adoption, the financial advisory and wealth management industry has been slow. Despite the rapid advancement of AI and technology, many advisers have continued to use old systems that, in some cases, date back decades. This failure has limited the improved management of client assets in a fast-changing economic environment.
As a result of slow technological advancements, among other reasons, we see a shift of more independent advisers emerging who are leaving traditional and broader organizations that rely on antiquated systems and or have a lack of customization for these advisers.
In terms of technology adoption, the financial advisory and wealth management industry has been slow. (Reuters/Dado Ruvic/Illustration/File Photo)
These systems lack the ability to tailor customization to clients and lack advanced research and analytics to help identify opportunities for clients. It's sad to say that many have to rely on going back to ole reliable Microsoft Excel!
WHAT IS ARTIFICIAL INTELLIGENCE (AI)?
At the end of the day, the inability of many advisers and their firms to adopt new technology to accommodate changing times is hurting their clients. It costs more money to maintain outdated systems than it does to simply adapt, and that cost is passed down to clients.
It is time for financial advisers – both small and large – to embrace modern technology, not run away from it. It is my opinion that aside from a physical office, the rest of our field is technological.
AI TECHNOLOGY UNLIKELY TO FULLY REPLACE FINANCIAL ADVISERS: MORNINGSTAR
When AI is applied to financial workflows, especially when integrated with secure technologies like blockchain, it greatly increases operational efficiency. Moreover, AI systems are better at carrying out continuous compliance checks and other operations (note-taking, billing, research) compared to the traditional methods used by humans, leading to reduced costs. Consequently, this change simplifies how the companies operate while ensuring that they deliver high-quality services to clients.
While many advisers are hesitant to embrace AI because they’re convinced it will take their jobs, or they cannot trust it, or they are convinced it will take over the world like the Terminator, a lot of younger advisers have been turning to the use of modernized technology, including AI, to help streamline business practices, grow their book of business, and expand their investment research horizons.
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Over the next few years, I anticipate that the continued trend of advisers going independent will continue and the adoption of AI within these practices will continue. With technology rapidly increasing and software updates coming daily, the world is quickly becoming responsive to AI and blockchain technologies.
Instead of falling behind and trusting the wealth of clients with antiquated technologies, we must begin the transition toward a more technologically inclusive world that focuses on enhancing the client experience.
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