A few days ago, I read an article from Yahoo! Finance about AI’s use in providing financial advice for investors. As one would suspect, the younger then age of the investor, the more likely they are to use AI for investment advice. No real earth-shattering news there. There is still a considerable amount of distrust there (so far) with getting investment advice (from all age groups) from AI and there’s still a considerable amount of “unknown” responses indicating uncertainty on the topic. Again, if we’re honest…nothing very earth-shattering.
It was my initial response to the article that shook me for a moment and caused me to spend the next few days making sure I was not going crazy. For most people…investment advice probably needs to be routed to AI.
“What do you know about that?!?!” you may be saying, “you’re just a banker”. Fair…but my degree in finance was in investments/financial management and I once was a financial advisor myself. (Word to the wise….don’t get into that industry a few years before a Great Recession occurs.)
But let’s be honest here…for most people that are not going to actively follow the market or the economy and just need to tuck some money away for retirement or for a rainy day, AI would do the trick. Truthfully, you probably don’t need AI anyway but the technology makes it feel more personalized and the process needs to be more personal if we’re talking about people’s money.
This isn’t Grumpy Ol’ Byron here either. None other than Warren Buffett recommends people buying/holding index funds if the investor doesn’t have the time or the ability to research investments to an extreme level. (Motley Fool)
Does this mean banks and investment houses need to fire all of their advisors and go all-in on AI. Not necessarily, but it may mean that department might be a bit bloated. It may mean that there are some opportunities to cross-train and re-train some of these employees to do something else within the bank. It may mean that some of these employees could be up-boarded and learn new trust and/or investment skills that might actually make the bank money instead of chasing down $100/month mutual fund sales. There’s nothing wrong with those…but which is more valuable to the bank?
Where is the downside in expanding your employee’s knowledge, increasing your product lines, while still maintaining the business you gathered prior but can now service more efficiently?
“Well, what if that $100/month business leaves?”. Good question. As a banker, do you refund every NSF fee request you receive? Do you up the prices on your CD’s 50 bps just because someone walked in and complained about what the bank down the street is paying? Some times you probably do. Some times it’s the right call. Some times…it’s best to let the other bank eat the interest expense for awhile or carry the overdraft account for awhile. I think you’ll also agree with me that not every threat to leave over something is actually carried out.
I am NOT saying that we should sacrifice our customer care and turn it into chatbots! There are times it is the right move to go “old school” and do it the “old way”. But we must adapt. We must be able to meet the needs of our customers in a financially astute way!
Unless the chatbot is named John Connor…then you definitely need to terminate that use of AI. (ROFL!)