Clouds and AI: Empowering Fiduciary Services

Agron Fazliu
5 min readMay 25, 2024
Credits: Uppsala University

Trust, legal, and fiduciary service providers are increasingly integrating cloud computing and turning to artificial intelligence (AI) to improve efficiency, enhance data security, and navigate complex regulations. The adoption of cloud technology provides scalable and secure data handling, while AI improves document processing and user interactions. Together, these technologies are transforming the sector, emphasizing the need for strategic implementation to maximize benefits, ensure compliance, and maintain relevance in the digital era.

In today’s rapidly evolving technological environment, industries such as trust, legal, and fiduciary services are increasingly recognizing the importance of integrating cloud computing and artificial intelligence (AI). This shift is driven not just by technological advancements but also by strategic objectives to enhance operational efficiency, strengthen data security, and effectively navigate complex regulatory landscapes. The UNEP Finance Initiative, after four years of research, emphasized in its 2019 report the critical need for these sectors to embrace innovation and progress. Coincidentally, traditional reliance on in-house or externally hosted IT solutions is shifting towards more flexible, scalable, and secure cloud-based infrastructures, which boost efficiency and open new opportunities.

Unlocking the Potential of Cloud Migration

Despite initial reservations, the migration to cloud computing in sensitive sectors such as legal, trust, and fiduciary services is proving advantageous, dispelling misconceptions about security risks. Top cloud providers heavily invest in advanced security measures covering physical, cyber, and operational domains, and offer compliance tools for regulations like GDPR and HIPAA, ensuring seamless legal compliance. With Microsoft Exchange Online holding approximately 72% market share of business emails, it’s probable that most of fiduciary companies utilize this service, which stores emails on Microsoft’s cloud. This suggests that a significant amount of data, especially documents shared via email attachments, is already cloud-based. Using other Software as a Service (SaaS) platforms, such as DocuSign or Clio, further indicates inevitability of cloud data storage. Given this backdrop, the decision to migrate to cloud is somewhat easier, although challenges persist in the migration approach itself. Strategies vary from basic lift-and-shift to more complex transitions into native cloud services. Cloud migration reduces the need for large initial investments in physical infrastructure by adopting a pay-as-you-go model that optimizes IT spending. Additionally, the scalability of cloud resources accommodates variable workloads. It is important, however, to continuously monitor and manage cloud resource consumption to avoid escalating costs. Cloud services also provide robust disaster recovery solutions by distributing data across geographically diverse servers, minimizing risks associated with hardware failures or natural disasters and ensuring continuous business operations. Cloud platforms enhance collaboration and remote work, crucial for industries requiring remote access to critical data, thus improving agility and client service from anywhere globally.

Leveraging AI for Operational Excellence

AI is transforming trust, legal, and fiduciary services by revolutionizing document analysis, risk management, and client interactions. AI algorithms expedite document review, swiftly extracting key information and identifying inconsistencies across extensive legal document repositories. For example, AI can standardize contractual terms or highlight compliance issues, boosting risk management. Analyzing large datasets, AI supports predictive analytics for proactive risk management, detecting fraud or compliance failures early. AI-powered chatbots and virtual assistants improve client service by instantly addressing inquiries, arranging appointments, and providing personalized updates on legal or financial issues. This not only enhances client satisfaction but also allows human resources to focus on more complex tasks. According to Accenture, AI could impact 40% of working hours, reallocating this workforce to other duties. AI systems continuously evolve through user interaction and feedback, ensuring they meet the dynamic needs of these sectors.

Strategic Implementation Insights

While the advantages of cloud computing and AI are clear, their strategic implementation must be carefully planned for success, to protect sensitive data, and mitigate risks.

Choosing the right migration approach and configuring cloud services to enhance data security are crucial. This involves implementing lift-and-shift vs. native cloud services, strong encryption, enforcing strict access controls, and conducting regular security audits.

Deploying AI privately can enhance data privacy for sensitive information. This approach involves managing large language models (LLMs) and data interactions within an organization’s privacy and security parameters, which may include Infrastructure as a Service (IaaS) in the cloud, rather than strictly in-house operations. This setup ensures that data is not shared with external AI providers for the purpose of learning. Given the current uncertainties in the legal framework surrounding AI, it seems wise to adopt this cautious approach until the EU legislation on AI is more clearly defined, although chatbots are currently categorized under Limited risk.

It’s important to distinguish between confidentiality management for LLMs and traditional cloud services. For LLMs, confidentiality concerns primarily relate to the handling of data used for learning and the user interactions during communication with the external LLMs. Chatbot services often involve a series of interconnected LLMs that work together to produce responses. AI service providers can assert that foundation LLMs do not learn from interactions with your data. It is important to note that this doesn’t necessarily mean that other LLMs in the series are also incapable of learning from your data. On the other side, confidentiality in cloud services, which is well-understood and effectively managed, typically focuses on broader data security and compliance measures.

Choosing technology partners familiar with the unique requirements of trust, legal, and fiduciary services is vital, as is the continuous monitoring and updating of security measures to address emerging threats and regulatory changes. Ensuring ethical AI use and adhering to data privacy and protection laws are essential to maintain client trust and compliance.

The integration of cloud computing and AI marks a transformative era for trust, legal, and fiduciary services, reshaping operational and client interaction paradigms. By strategically adopting these technologies, companies not only enhance data security and operational efficiency but also position themselves for innovation and client-centricity in the digital age. As these sectors undergo digital transformation, the synergistic use of cloud and AI technologies becomes a key factor in their success and ongoing relevance in the contemporary landscape. This proactive approach enables them to meet current demands and adapt to future challenges and opportunities.