{"id":10401,"date":"2023-07-05T09:16:24","date_gmt":"2023-07-05T14:16:24","guid":{"rendered":"https:\/\/rixtrema.com\/blog\/?p=10401"},"modified":"2023-07-05T09:22:46","modified_gmt":"2023-07-05T14:22:46","slug":"how-will-ai-transform-financial-services","status":"publish","type":"post","link":"https:\/\/rixtrema.com\/blog\/how-will-ai-transform-financial-services\/","title":{"rendered":"How Will AI Transform Financial Services?"},"content":{"rendered":"\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><a href=\"#are-investors-bullish-on-ai\">Are Investors Bullish on AI?<\/a><\/strong><\/li>\n\n\n\n<li><strong><a href=\"#how-powerful-will-ai-be-for-advisors\">How Powerful Will AI Be for Advisors?<\/a><\/strong><\/li>\n\n\n\n<li><strong><a href=\"#learning-how-to-leverage-new-tech\">Learning How to Leverage New Tech<\/a><\/strong><\/li>\n\n\n\n<li><strong><a href=\"#the-limitations\">The Limitations<\/a><\/strong><\/li>\n<\/ul>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n<h2><strong><a id=\"are-investors-bullish-on-ai\"><\/a>Are Investors Bullish on AI?<\/strong><\/h2>\n<p>As new technologies reconfigure the financial landscape, most clients believe <strong>AI<\/strong> <em>will help<\/em>, not hinder, advisors in their business.<\/p>\n<p>Investors are bullish on<a href=\"https:\/\/rixtrema.com\/blog\/ai-in-finance-challenges-and-opportunities-for-risk-averse-advisors\/\"> financial advisors using artificial intelligence<\/a>, and fintech companies are racing to meet the demand.\u00a0\u00a0<\/p>\n<p>Most <em>investors believe <strong>AI<\/strong><\/em> will <a href=\"https:\/\/www.investmentnews.com\/ai-in-2021-ria-use-cases-206705\">help advisors better serve their clients,<\/a> according to a recent survey by Morgan Stanley Wealth Management. Thus, investors confirmed that they would be interested in working with an advisor who leveraged the technology, with investors between the ages of 35 and 44 expressing the most enthusiasm.<\/p>\n<p><a href=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/Are-Investors.jpg\" data-rel=\"lightbox-image-0\" data-rl_title=\"\" data-rl_caption=\"\" title=\"\"><img loading=\"lazy\" decoding=\"async\" class=\"alignleft  wp-image-10406\" src=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/Are-Investors.jpg\" alt=\"\" width=\"369\" height=\"181\" srcset=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/Are-Investors.jpg 897w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/Are-Investors-300x147.jpg 300w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/Are-Investors-768x377.jpg 768w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/Are-Investors-500x245.jpg 500w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/Are-Investors-800x392.jpg 800w\" sizes=\"auto, (max-width: 369px) 100vw, 369px\" \/><\/a><\/p>\n<p>However, the study also found that most <em>investors don\u2019t believe <strong>AI<\/strong><\/em> will fully replace their advisors, and they agreed that building real advisor-client relationships is still important.<\/p>\n<p>\u00a0<\/p>\n<h2>\u00a0<\/h2>\n<p>\u00a0<\/p>\n<h2><strong>How Powerful Will AI Be for Advisors?<\/strong><\/h2>\n<p>According to Jeff McMillan, head of analytics, data and innovation for Morgan Stanley Wealth Management, while <em><strong>AI<\/strong> is clearly groundbreaking<\/em>, and we are just scratching the surface of its potential impact within financial services, this data illustrates a truth we\u2019ve known for some time, the clients who are most engaged with their financial advisors are also the most satisfied. Within this context, AI should be viewed not as a replacement for human input, but as <a href=\"https:\/\/www.investmentnews.com\/want-to-keep-your-job-learn-to-embrace-ai-236739\">a powerful tool to help turbocharge <\/a>a financial advisor\u2019s practice management and client interaction capabilities.<\/p>\n<p><a href=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/Morgan-Stanley.jpg\" data-rel=\"lightbox-image-1\" data-rl_title=\"\" data-rl_caption=\"\" title=\"\"><img loading=\"lazy\" decoding=\"async\" class=\"alignleft  wp-image-10405\" src=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/Morgan-Stanley.jpg\" alt=\"\" width=\"433\" height=\"220\" srcset=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/Morgan-Stanley.jpg 902w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/Morgan-Stanley-300x152.jpg 300w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/Morgan-Stanley-768x390.jpg 768w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/Morgan-Stanley-500x254.jpg 500w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/Morgan-Stanley-800x406.jpg 800w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/Morgan-Stanley-900x458.jpg 900w\" sizes=\"auto, (max-width: 433px) 100vw, 433px\" \/><\/a><\/p>\n<p>Morgan Stanley is one of several firms that already have an<em><strong> AI<\/strong> application<\/em> on the market for their advisors. The company was an early partner with <em>OpenAI<\/em> and is using its <em>GPT-4 technology<\/em> to create an internal chatbot that advisors can use to query <em>Morgan Stanley\u2019s<\/em> library of proprietary content.<\/p>\n<p>They have been joined by Morningstar with the <em>generative text <strong>AI<\/strong> \u201cMo,\u201d<\/em> which debuted at the company\u2019s annual conference in April. Mo will be available across Morningstar\u2019s flagship products, including Advisor Workstation, at no extra cost to advisors.<a id=\"learning-how-to-leverage-new-tech\"><\/a><\/p>\n<p>\u00a0<\/p>\n<h2><strong>Learning How to Leverage New Tech<\/strong><\/h2>\n<p>Built using Morningstar\u2019s investment research library and<em> Microsoft\u2019s Azure OpenAI<\/em> service, advisors can use Mo to surface and summarize insights and analysis in a conversational format. James Rhodes, Morningstar\u2019s chief technology officer and president of data, research and enterprise solutions explains that if a client comes in with a question about a specific investment, an advisor can query it into Mo and get an answer based on Morningstar\u2019s research and editorial content.<\/p>\n<p>Rhodes thinks that we\u2019re in a world where there is so much data and so much information that sifting through that to separate out the signal from the noise is becoming increasingly challenging.<\/p>\n<p><a href=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/increasingly-challenging.jpg\" data-rel=\"lightbox-image-2\" data-rl_title=\"\" data-rl_caption=\"\" title=\"\"><img loading=\"lazy\" decoding=\"async\" class=\"alignleft  wp-image-10404\" src=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/increasingly-challenging.jpg\" alt=\"\" width=\"457\" height=\"299\" srcset=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/increasingly-challenging.jpg 892w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/increasingly-challenging-300x196.jpg 300w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/increasingly-challenging-768x502.jpg 768w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/increasingly-challenging-500x327.jpg 500w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/increasingly-challenging-800x523.jpg 800w\" sizes=\"auto, (max-width: 457px) 100vw, 457px\" \/><\/a><\/p>\n<p>The current <em>swell of <strong>AI<\/strong> technology<\/em> is a pivotal moment in the history of technology, akin to moving written content onto CD-ROMs in the \u201990s, or uploading CD-ROMs onto the internet in the 2000s.<\/p>\n<p>This is very similar to that type of moment. It is an opportunity and a transformative technology for the industry. We need <a href=\"https:\/\/rixtrema.com\/blog\/leveraging-technology-to-ensure-compliance-and-manage-risk-in-a-volatile-market\/\">to learn how to leverage the new tech<\/a> in a responsible way that is really going to unlock the benefits of it and help investors be successful in assisting their clients.<a id=\"the-limitations\"><\/a><\/p>\n<p>\u00a0<\/p>\n<p>\u00a0<\/p>\n<h2><strong>The Limitations<\/strong><\/h2>\n<p>Responsible use is really key,<em> because <strong>AI<\/strong> has demonstrated<\/em> the ability to do impressive tasks but has shown to simply make things up. <em>ChatGPT<\/em>, in particular, frequently produces factual errors when prompted for facts, inventing entire studies and data sets. With this in mind, how can financial advisors trust it with compliance issues that are plagued with liabilities for them and their clients?<\/p>\n<p>The answers provided by these services are unreliable to say the least. However, the companies that implement these new tools have guardrails in place to help them be more accurate than consumer-facing <em><strong>AI<\/strong> programs<\/em>. For example, <em>like Morgan Stanley\u2019s <strong>AI<\/strong><\/em>, Mo only pulls from Morningstar\u2019s internal data, not the entire internet. It also puts constraints on Mo so that it can only answer questions related to finance.<\/p>\n<p><a href=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/Companies-try-to-make.jpg\" data-rel=\"lightbox-image-3\" data-rl_title=\"\" data-rl_caption=\"\" title=\"\"><img loading=\"lazy\" decoding=\"async\" class=\"alignleft  wp-image-10403\" src=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/Companies-try-to-make.jpg\" alt=\"\" width=\"362\" height=\"200\" srcset=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/Companies-try-to-make.jpg 906w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/Companies-try-to-make-300x166.jpg 300w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/Companies-try-to-make-768x424.jpg 768w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/Companies-try-to-make-500x276.jpg 500w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/Companies-try-to-make-800x442.jpg 800w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/Companies-try-to-make-900x500.jpg 900w\" sizes=\"auto, (max-width: 362px) 100vw, 362px\" \/><\/a><\/p>\n<p>Companies try to make clear choices over which partners they are going to use and how they are going to implement a system to make sure data is secure and private.<\/p>\n<p>In addition to Morgan Stanley and Morningstar, Riskalyze, FMG Suite, Hearsay Systems and Orion\u2019s Redtail CRM have all introduced different forms of <em><strong>AI<\/strong> functionality<\/em> for advisors. \u00a0<\/p>\n<p>\u00a0<\/p>\n<p><em>RiXtrema offers a wide range of financial tools to our clients. Our <strong>Portfolio Crash Testing (PCT)<\/strong> tool helps financial advisors determine the best way to adjust clients\u2019 portfolios to reflect their values and needs. Also, RiXtrema helps financial professionals supercharge their\u00a0financial advisory\u00a0practice with\u00a0<strong>AI<\/strong>.<\/em><\/p>\n<p><em>You can learn more about our products and services on our website <\/em><em><a href=\"http:\/\/www.rixtrema.com\">www.rixtrema.com<\/a><\/em><em> and sign up for a free trial for any of the tools.<\/em><\/p>\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n","protected":false},"excerpt":{"rendered":"<p>As new technologies reconfigure the financial landscape, most clients believe AI will help, not hinder, advisors in their business.<\/p>\n","protected":false},"author":25,"featured_media":10407,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[168],"tags":[2351,2369,2368,2372,7,2371,2370,2367,2366],"class_list":["post-10401","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-ai","tag-ai-application","tag-ai-technology","tag-believe-ai","tag-financial-advisor","tag-gpt-4","tag-gpt-4-technology","tag-microsofts-azure-openai","tag-openai"],"jetpack_featured_media_url":"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/How-Will-AI-Transform-Financial-Services-1.jpg","yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v15.9.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How Will AI Transform Financial Services?<\/title>\n<meta name=\"description\" content=\"As new technologies reconfigure the financial landscape, most clients believe AI will help, not hinder, advisors in their business.\" \/>\n<link rel=\"canonical\" href=\"https:\/\/rixtrema.com\/blog\/how-will-ai-transform-financial-services\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How Will AI Transform Financial Services?\" \/>\n<meta property=\"og:description\" content=\"As new technologies reconfigure the financial landscape, most clients believe AI will help, not hinder, advisors in their business.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/rixtrema.com\/blog\/how-will-ai-transform-financial-services\/\" \/>\n<meta property=\"og:site_name\" content=\"RiXtrema.com\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/LarkspurRiXtrema\/\" \/>\n<meta property=\"article:published_time\" content=\"2023-07-05T14:16:24+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-07-05T14:22:46+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2023\/07\/How-Will-AI-Transform-Financial-Services-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1800\" \/>\n\t<meta property=\"og:image:height\" content=\"1029\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@RiXtrema\" \/>\n<meta name=\"twitter:site\" content=\"@RiXtrema\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\">\n\t<meta name=\"twitter:data1\" content=\"5 minutes\">\n<!-- \/ Yoast SEO Premium plugin. -->","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/posts\/10401","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/users\/25"}],"replies":[{"embeddable":true,"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/comments?post=10401"}],"version-history":[{"count":6,"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/posts\/10401\/revisions"}],"predecessor-version":[{"id":10413,"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/posts\/10401\/revisions\/10413"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/media\/10407"}],"wp:attachment":[{"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/media?parent=10401"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/categories?post=10401"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/tags?post=10401"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}