Are there any practical uses for artificial intelligence in finance?
Naysayers all over the world-wide-web will say that AI is just a fad; a continued blab at the expense of optimists that are excited by the prospect of a truly virtual future at the hands of every industry. And whilst not necessarily at the stage where a bank could consider itself the next Tyrell Corporation in its adoption of humanoid robots, it must be said that a machine-heavy workforce is upon us in the financial world, just like the articles say.
Social media hype videos of driverless cars being tested are now becoming a tangible reality, looking into the revolution of energy over fuel, and improving road safety for all. The levels of practical assistance applied by artificial intelligence technology knows no bounds. These robots aren’t here to nick your jobs, as many believe they will, right now they’re here to help operational processes, marketing automation, social media and overall performance.
In fact, the financial services industry (FSI) has a claim to be one of the most AI-friendly adopters right now. Asset managers can streamline the processing of their fund data using artificial intelligence, whose data processing and transaction-tracking ability succeeds any human effort in terms of speed and efficiency. Any human error that could easily occur in the rigorous task of managing assets is almost completely eradicated.
Portfolio management is a bread-and-butter task for a bot, with the rise of robo-advisors proving the popularity of this service to investors. AI-run companies such as Wealthfront, Betterment and Wealthsimple have become the ultimate disruptors to the wealth management industry due to their low cost automated advice which, whilst removing an element of human interaction, becomes a key staple for attracting a new investor base. The idea of an ‘average investor’ has become commonplace, and a target audience for traditional firms through in-house robo-advisors.
Of course, the prospect of leveraging digital friends has not been ignored by such asset managers as Fidelity or Vanguard who have done exactly this. Even the past two years has seen a rise in ‘quant funds’ that rely on fast-paced quantitative data analysis and the ‘Artificially Intelligent Hedge Fund’, developed by established hedge funds including Ray Dalio’s Bridgewater Associates and Point72 Asset Management. If you can’t beat the digital disruptors, join them.
Elsewhere, transaction tracking brings security into question. Any anomalous fraudulent activity can be instantly flagged by AI technology, which enhances trust between firm and customer: the ultimate brand boost. For financial marketing teams that can easily be fearful of compliance issues in the face of tight regulation, AI can provide solutions for that too, automatically checking disclaimers, brand guidelines and other documentation for incorrections that could unfortunately be overlooked by the human editing eye.
Whilst the above examples highlight the perks of the technology over a human workforce, it’s not that they are taking over everyone’s complete workflow. Leaving the lengthy data processing and administrative jobs to the bots can therefore free up the time to focus on client interaction which, whilst requiring the emotive touch that an AI unit lacks, can also be enhanced through the technology. Therefore, it is now the marketing teams in the FSI that are beginning to see the perks of utilising artificial intelligence as a sidekick.
The adage ‘data is the new gold’ transcends to the marketing world, with AI tools on offer to find data from readership figures to the most well-received industry trends and keywords. These are the nuggets of gold for content creators in marketing teams. With robots taking care of scanning competitors’ content and combing the globe for the financial world’s best-in-show articles, financial writers can concentrate on writing valuable investment commentaries and market outlooks, having found out from their AI friends which content the audience really wants to read about. Other time saving applicants for writers include spell-checkers such as Grammarly or, going the whole AI-hog, fully generated blog posts from products including Articoolo. Yes, you can now generate full industry-specific articles using only a machine…
Now, that may seem lazy, or even farfetched, but real-life use cases of Natural Language Generation (NLG) determine the validity of this AI usage. One company, Narrative Science, has developed its Quill software to do just this. Specifically of concern to FSI marketers is its ability to generate 10 to 15 financial reports in mere minutes, already used by major players including T. Rowe Price and Credit Suisse. It’s freeware Quill Engage also utilises AI to transfer numerical Google Analytics metrics into qualitative data for marketers to enhance performance monitoring.
Elsewhere, the Associated Press’ in-house Wordsmith software has created 1.5 billion pieces of content a year, boasting conglomerate customers such as Microsoft. This phenomenal output of content based on industry trends is a revelation, so long as it’s cross checked by human marketers too: they’re editors after all, as well as social media managers and CMS users. Luckily, these latter marketing jobs can also be partly assisted by AI; the discovery of a company’s most receptive users and reader base, and stringent production tasks such as cross-linking and SEO improvement.
The ultimate aim for financial marketers is to cut through the clutter, to find out the most pertinent data to improve performance, and to build relationships through better content and efficient automation. AI can take on many burdens, acting as stepping stones towards learning a client’s narrative, ready for the human voice to carry on the job. Maybe Narrative Science’s Kris Hammond’s assertion that a computer will win a Pulitzer prize within five years isn’t too far off. Until then financial marketers, make AI your friend, and you shall be rewarded.