It’s no secret that ChatGPT has captivated imaginations and that AI is WealthTech’s shiny new toy. Everybody wants to jump on the bandwagon but are unsure of how it can truly be used to maximize efficiency or profit margins. While some are afraid of its progression and ability to one day replace the human element, it’s important to understand that it’s just a tool. When you understand how to use AI technology to fit the needs and overall strategy of your business, you can solve some of the most complex questions and eliminate the fear of the unknown.
There are three areas that firms need to understand before implementing AI solutions into their business. First is how they can use AI to complement their business initiatives. The second is what resources can be used to enhance the value and results of AI. The last area they need to understand is that it will evolve and progress over time.
Don’t Let Your AI Run Wild
While many of us don’t take movies—such as M3GAN and iRobot—seriously, there is still an underlying importance in harnessing the power that AI is capable of. For starters, AI in WealthTech can cover more ground than many think is possible, and the use cases are growing every day. It is important to first understand your full business strategy and the gaps that threaten that strategy both currently and in the future. The next step is to explore the technology available in the marketplace to better understand how AI can fill those gaps. AI should not be used as much of a “selling tool” to differentiate your business; it should be used as a way to maximize the efficiency of your human resources.
AI Cannot Survive on AI Alone
The fear of AI replacing jobs is not as real as many may think. While utilizing AI may alter job functionality, incorporating a “human in the loop” is key to maximizing the impact and increasing the accuracy of AI. Technology, while highly intelligent, will only do what it is told to do. The human element is the only way to create supervised learning and enhance the accuracy of functionality – especially when it comes to data processing and aggregation.
Value > Trends
The pressure to create extensive tech stacks and implement the latest “most talked about” technology is always a top FOMO driver for executives. However, AI FOMO can make a firm short-sighted and lead them to invest in something that, while cool for a moment, doesn’t provide long-term value. Value should always outlast the trend. Nobody wants to be too far on the conservative or progressive pendulum, and there are ways to mitigate the risks associated with implementing new tech. This can be done by 1) understanding use cases that are relevant for short- and long-term value, 2) only incorporating technology that has been tested in the market and proven by data to provide actual return on investment, and 3) prove that it can enhance the economics of being in business.
Before implementing AI technology, it is critical for firms to not only evaluate the current technology landscape and use cases, but also to anticipate the evolution of change in WealthTech. How are client expectations changing? How are current and future regulatory requirements straining internal resources? With data being the center and heartbeat of your business, how do you process, aggregate, and translate that data accurately and effectively to your clients? AI technology isn’t going everywhere all at once; the key is to find out where the value lies and how to use it to help you achieve your business goals.