But don’t expect a flawless transition to an AI-enhanced world. “AI uses refined algorithms, predictive analytics, natural language processing, speech recognition, image recognition and other advances in machine learning to make sense of the data that you capture,” Hawley says. “Not surprisingly, the biggest challenge is that AI is only as good as the data that is feeding it—and more importantly, the human that is interpreting it.”
And with reams of data come concerns about cybersecurity. “Establish clear and transparent policies for cybersecurity and the protection of clients’ personal data,” Hawley stresses.
Ultimately, it’s worth noting that while AI can enhance advice, it won’t likely replace human interactions. “Many advisors are likely to think of AI in the context of robo-advice and automation,” Hawley acknowledges, adding that the most immediate impact of this technology is to enhance the human connection.
“With AI you can leverage what you’ve learned about current clients to make more informed decisions around marketing and prospecting to attract and retain new clients,” he says.
The widespread use of AI in financial services seems inevitable. “Acceptance is rising quickly,” says Swenson, “but more focus must be paid to best practices, cybersecurity, vendor due diligence and industry safeguards.”
Swenson went so far as to predict that the majority of firms will be relying on AI within the next five years. “Watch for ever-greater automation, less administrative tasks, more efficiencies,” he says. “What will not change, however, is the growing demand for great advisors providing expert advice.”