Aug 10th

AI in Finance

How artificial intelligence is showing up in financial services and family office offerings, and why human intelligence is still vital

By Teague Sanders, Senior Vice President and Senior Portfolio Manager, Whittier Trust 

It’s nearly impossible to open an article these days without someone—journalists, pundits, commentators—talking about how artificial intelligence (AI) is a game-changer, primed to revolutionize just about every industry. But what about AI in financial services and in family office services? 

“AI and artificial intelligence have taken a giant leap forward with large language models and the ability for more normalized speech recognition patterns,” says Whittier Trust SVP and Senior Portfolio Manager Teague Sanders. “But to say that it's precise and accurate, in every respect, is still far from true.” Being precise and accurate should be a mandate for anyone offering financial or family office services, so using such technology judiciously is important. Read on to learn how it’s showing up in the industry.  

AI in Finance

As an industry and as a company, we have been using various forms of AI for a long time,” Sanders explains. “Anytime you're using a data aggregator, such as Bloomberg or FactSet., that’s a form of artificial intelligence. When we graph and combine various data sets, we’re not doing that manually, so the industry hasn’t been completely caught off guard by AI in finance.” 

By implementing AI technologies, financial institutions, advisory firms and family office services can improve data analysis and enhance risk assessment, sometimes allowing for faster, more precise decision making by the advisors. AI-powered algorithms can quickly analyze vast amounts of data, enabling professionals to gain valuable insights and make informed decisions. Additionally, AI-driven risk assessment models can spot anomalies and identify possible risks, protecting investments and ensuring regulatory compliance.

What is a Chatbot? Understanding the potential

Chatbots have gained significant attention in recent years, and their potential in the financial sector is immense. In fact, you’re probably already seeing some of your financial institutions, such as banks and credit card companies, use chatbots to address simple questions on a digital portal (either by smartphone or computer). A chatbot is a virtual assistant, powered by AI, that can engage in conversations with users, providing instant responses and information. By leveraging natural language processing (NLP) algorithms, chatbots can understand and interpret user queries, allowing professionals to offer efficient services and responses to their clients. For example, if you have a question about a charge you don’t recognize on your credit card statement, a quick query through your credit card app may be able to help without the hassle of making a phone call. 

Within a family office, chatbots could be leveraged to automate routine tasks such as trade execution and performance reporting, freeing up skilled professionals' time to focus on strategic activities. There are also some interesting applications of AI programs such as the much-talked-about ChatGPT. For example, if someone is looking for help planning a vacation itinerary or researching a new neighborhood, ChatCPT can help with the initial research before a skilled client services manager steps in to refine what the client will ultimately see. 

The Future: AI in financial services paired with human expertise

As AI continues to evolve, it is important for professionals in all industries to stay informed, adapt to changing trends, and harness the technology’s power. Sanders sees plenty of opportunities to leverage AI for the good of his clients. “We always try to avoid a group-think mentality, so putting an idea into an AI-driven program and asking for ideas can be a great way to start a brainstorming session. It can help us view a problem or challenge from a different perspective,” he says. “It can help get a team’s creative and analytical juices flowing.” 

The human element of family office services and managing clients’ wealth is never going to go away, particularly in a high-touch, highly relational company such as Whittier Trust. While the team at Whittier is open to embracing smart uses of AI technology, there is, and will always be, a thoughtful human behind every client interaction. AI is something that can enhance or supplement that human intelligence but never replace it. 

Ultimately, Sanders says, it’s vital to keep growing with the industry. “We embrace new technologies and new ideas. We’re not afraid of them,” he says. By leveraging the capabilities of AI, professionals can unlock new opportunities, elevate their services, and create a brighter future for the industry as a whole.

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