Artificial Intelligence: Will Revolutionize Investing – What Morgan Stanley “Sees” – Financial Post

Artificial Intelligence: Will Revolutionize Investing – What Morgan Stanley “Sees” – Financial Post

Schools are starting to use artificial intelligence (AI) chatbots as educational tools, businesses are betting on AI to automate repetitive tasks, and insurers are handling new claims with new technology. Given the “impressive capabilities” of artificial intelligence, it makes sense that investors should also think about the profits that could be made.

Financial advisers say technology will drive big changes in investing, though clients still prefer human contact, according to a survey of at least 1,000 investors and analysts by Morgan Stanley’s wealth management division released Wednesday.

Artificial Intelligence: Proven to be a better…intensivist than humans!

As highlighted, artificial intelligence is set to have a major impact on finance, with 72% of investors calling it a potential “game changer”. “Most people believe that artificial intelligence will revolutionize financial services,” the study said.

“While AI is clearly revolutionary and we’re only just beginning to see its potential impact on financial services,” said Jeff McMillan, head of analytics, data and innovation at Morgan Stanley, in a statement.

Even if AI revolutionizes the industry, investors are unlikely to place all their trust in the technology and human advisors will continue to play a vital role, with more than 80% of survey respondents saying that AI will not replace never fully human orientation.

However, as noted, investment firms that adopt AI are likely to retain an edge over their competitors soon enough, as 63% of investors said they would rather work with a firm that leverages the technology than another. who does not.

Artificial intelligence and investments

Morgan Stanley has been using artificial intelligence to strengthen its wealth management arm for years. In 2017, the bank launched AI-powered software to help its thousands of financial advisors create personalized plans. In 2019, he developed a model that could generate original equity trading strategies based on patterns identified in reports from Morgan Stanley’s own analysts. And in 2021, the bank announced a partnership with Microsoft to integrate the technology company’s cloud computing and artificial intelligence, a range of tools with Morgan Stanley’s investment services.

McMillan described Morgan Stanley’s big bets on artificial intelligence as a “business imperative” speaking at the Fortune conference, saying its use in consulting was “in the best interest of the client”.

Morgan Stanley hit another milestone in March this year when it announced an investment and partnership with leading artificial intelligence startup OpenAI. Using the same technology that powers ChatGPT, Morgan Stanley launched its own chatbot in beta that would help the bank’s 16,000 financial advisors navigate its vast libraries of financial data and analysis to create personalized advice.

“People want to be as knowledgeable as the smartest person” at Morgan Stanley, McMillan said in an interview with CNBC. “It’s like having the chief strategist sitting next to you when you’re on the phone with a client.”

Morgan Stanley’s bet on AI for its wealth management division – which generated $6.6 billion in revenue in the first quarter of 2023 – could pay off, according to a recent survey that found 74% of investors claim that financial advisors would work better if they were assisted by artificial intelligence.

But the survey results also suggest that AI should remain just an assistant, rather than taking over all the tasks of financial advisors, with 88% of respondents saying face-to-face interactions were “extremely important ” for financial advisors.

While some models designed specifically for stock trading have proven successful, some experts have warned that investors should not blindly trust apps like ChatGPT with their money, as the technology is always prone to egregious errors.

A University of Florida study found that ChatGPT could outperform human analysis in predicting stock movements based on financial news headlines, although in an interview with Fortune the researchers warned that the models are always subject to errors or misinterpretation of information.

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