Can a robot anticipate the perfect investment?

By Juan Bello, Head Sustainability Studios Strategy & GTM at GlobalLogic Latin America.

Artificial Intelligence (AI) has become the driving force in the transformation of digital finance, redefining traditional roles within banks, financial entities, and industry professionals. AI-driven robo-advisors are gaining popularity by using this technology to manage investment portfolios, taking into account investors’ risk preferences and financial goals.

At GlobalLogic, we foresee a revolution in the sector, driven by an evolution that promises to redefine our perception of investments.

An Ally in Decision Making

Generative AI makes financial advice accessible to all by reducing costs to virtually zero. Imagine a world where we can access top-tier advice 24/7. We are on the threshold of a new digital era, and AI is the driving force behind this unprecedented transformation.

While no technology can fully predict human behavior, AI plays a crucial role in assessing credit, financial, and operational risks in an increasingly complex economic environment.

By enabling machines to generate recommendations and make data-based decisions in real time, Generative AI emerges as the most revolutionary technology, capable of completely eliminating the costs associated with financial advice. However, the evaluation, far from seeking absolutely correct answers, is moving towards finding reasonable and plausible responses. This approach is similar to how we evaluate people’s responses in similar situations.

Digitalization and AI Development

Digitalization and AI development aim to achieve automation in finance to quickly find the best possible returns.

The 10 Commandments of Generative AI

1. Cost Reduction: According to an Autonomous report, implementing AI in financial services can reduce operational costs by 22% by 2030.
2. Financial Inclusion and Zero Cost: It can reduce the costs of financial advice to virtually zero, making it accessible to a broad range of investors. Generative AI is paving this path by offering advice to those who previously had no access. Additionally, the hyper-connected business infrastructure is enabling financial inclusion globally.
3. Precision in Decisions: AI can analyze vast amounts of data to identify trends and patterns, aiding in informed decision-making. According to a Stanford University study, AI has the potential to generate economic growth of up to $13 trillion by 2030, as it can enhance efficiency across various industries.
4. 24/7 Accessibility: AI is available around the clock, meaning investors can receive real-time advice without time restrictions.
5. Automated Generation of Complex Documents: Such as business model canvases, presentations, and client profiles. This significantly reduces the time needed to create such content.
6. Enhanced Efficiency and Productivity: Allows teams to quickly create high-quality documents and presentations.
7. Evolution of Current Roles: Despite fears about automation, Generative AI does not necessarily eliminate jobs. Rather, it enhances productivity and allows workers to tackle more complex and enriching tasks. Collaboration between humans and machines is key to fully leveraging this technology.
8. Combination of Human Skill and AI: The collaboration between humans and machines, where machines perform repetitive and knowledge-based tasks while humans validate and quantify the quality of the outcome.
9. Focus on Sustainability: Tools are currently being explored to make code more energy-efficient and sustainable.
10. Personalization: AI personalizes investment recommendations considering the individual risk tolerance and financial goals of the investor.

Focus on Cybersecurity

All technological progress is accompanied by risks of cyber attacks, which are also constantly evolving. Therefore, it is crucial to choose a financial institution or FinTech that is not only at the forefront of financial innovation but also invests significantly in protecting the data and assets of its clients.

The strength of the proposal offered by the bank or FinTech does not only refer to its ability to generate investment recommendations through Generative AI but also to its commitment to ensuring the security and integrity of client financial information. Trust in AI technology and data protection must go hand in hand in this new digital financial landscape.

Cybersecurity is a crucial element in this process. Choosing a bank that cares about information security becomes even more important as we move towards a future increasingly driven by technology.