There has been much discussion about the potential risks and rewards of generated pre-trained transformers, commonly known by their acronym GPT, such as OpenAI’s GPT-4 in financial services. However, regardless of opinion, there is no dispute that GPT will continue to exist.
As such, one of the biggest risks for wealth managers regarding GPT is the inability to ignore it and explore the opportunities it may bring. Asset managers such as Morgan Stanley, which have adopted GPT, are transforming their businesses and tend to be increasingly competitive with other markets.
Of course, there are legitimate concerns about how to effectively and safely apply the GPT in regulated industries. And a strong associated risk framework and human oversight are essential to their successful use.
However, asset managers should be careful not to fall into the trap of sitting on the sidelines to see how the use of this technology unfolds. The pace of change is faster than ever and businesses that find ways to work with the GPT are benefiting from significant financial, productivity, customer and compliance gains.
economic benefits
The first major benefit of deploying AI technology such as GPT is that it can improve a company’s financial performance.McKinsey report State of AI in 2022 Review the evolution of the use of AI technology over the past five years. It found that of all companies using AI across their operations, 63% reported increased revenue and 32% reported reduced costs.
The report also identified a group of companies called “AI High Performers,” defined as companies that derive 20% of their earnings before interest and tax (EBIT) from the use of AI. These companies typically take a long-term view and adopt a learning approach to AI. They have learned from past successes and failures and have steadily built their use of AI over time. Among best practices, it is likely to adopt a full lifecycle approach to AI model development and deployment, integrate AI models into business processes, and form teams for data science and AI development.
Remarkably, McKinsey found that the proportion of firms falling into the high performers category has stabilized at around 8%, while at the same time this group of high performers is growing at an ever accelerating rate. I also discovered that I was staying away from the competition. In this study he mentions broader applications of AI beyond GPT, but organizations that have a long-term view and are ready to invest and explore different use cases for the technology will have huge economic potential. It is clear that you can reap the benefits. .
Increased productivity
In addition to the financial benefits, GPT significantly increases productivity by automating routine tasks, allowing asset managers to focus on higher value activities. For example, financial advisors can use GPT to unearth relevant insights without having to spend hours searching databases and reports to support their clients. Not only will this help improve efficiency, but it will also help improve job satisfaction for wealth managers, which is particularly welcome for many wealth managers given the continued tightness in the labor market due to the pandemic. It should be done.
A good example of this trend is a 2022 Github survey of developers using the Copilot tool, an AI tool that converts natural language into code using OpenAI’s Codex. Of him, 88% of Copilot users agreed that using Copilot made them more productive, and 96% said repetitive tasks were faster. In addition, 74% said they were able to focus on more satisfying jobs, and 60% said they were more satisfied with their jobs.
Customer benefits
By assisting financial advisors in their work, GPT ultimately benefits end clients as well. For example, advisors benefit from more accurate data analysis at scale. As a result, clients receive improved investment strategies backed by personalized advice. A financial advisor also assists in written communication with clients to assist them in making decisions. In addition, GPT facilitates the continuous learning and skill development of its financial advisors, ensuring that their clients receive the best possible service by keeping them up-to-date on industry trends and investment opportunities. .
Benefits of compliance
Finally, in an industry where regulatory compliance is extremely important, GPT can help wealth managers navigate the complexities of financial regulation. In conjunction with a decision intelligence platform for detecting and monitoring compliance issues, GPT can be used, for example, to provide answers to regulatory questions or guide advisors on next best course of action when compliance issues arise. You can provide financial advisors with regulatory guidance by helping them make decisions. is flagged.
Humans are often the weak link in compliance regimes, and this combined approach can help asset managers increase confidence that their employees are adhering to their compliance obligations.
In conclusion, GPT says: Learning how to work with them is essential and can bring many benefits to your business in terms of financial performance, compliance and productivity.
To take advantage of these benefits, asset managers must take a long-term approach. Instead of looking to AI or GPT as a quick fix, be prepared to explore, experiment and test.
Firms that achieve this can deliver significant business transformation, but wealth managers who wait too long inevitably fall further behind the competition. Ultimately, the question asset managers should ask themselves is not, “What are the risks of GPT?” Rather, “What are the risks of not using them?”
Nathan Stevenson is the CEO of ForwardLane
