The Long Summer Of AI

Artificial intelligence has a long and storied history. It evokes images of robots taking over society, doing our dishes, balancing our checkbooks, winning at chess. The New York Times recently found it performing standup comedy.

Artificial intelligence also has a long history as an overhyped dud.

The popular imagination about robots has led to bouts of overexcitement, hyperbole, futuristic evocations and finally impatience and anger whenever AI technologies fail to develop quickly enough for the masses. That disillusionment has led to numerous periods of “AI Winter”—specifically in the 1970s and 1990s—eras when funding dried up from impatient investors. And a new winter is likely coming, warn the Cassandras.

That hype part of AI is still very real, says serial entrepreneur and technology consultant Sultan Meghji.

“In 25 years, I have seen in the private sector six companies do artificial intelligence properly, six in total, and not half of them are financial services,” says Meghji, the founder of Virtova, a tech advisor to private equity firms and financial services companies. In other words, he thinks top-to-bottom AI, where every link in the chain is automated, is not really being done. 

But put the delusions of grandeur aside, and the reality is that AI has come a long way in the last few years. Its algorithms have become more robust, Meghji says. The data it mines (AI’s lifeblood) has become much richer and more accessible. People are now building ETFs out of artificial intelligence, too. Advisors have learned to find clients with it, learned when to engage clients with it. Pershing even says AI can tell you when a client is about to leave you.

A lot of fintechs are waving the AI flag, Meghji says, and in the back office, Morgan Stanley, TD Ameritrade and JP Morgan are building robust AI programs. Last October, Greenwich Associates said in a report that 15% of jobs in finance are at risk of being replaced by AI or machine learning in areas like research, trading, analysis and sales.

A Tool For Advisors

If Amazon knows what sweater you like and offers you another, just think of what the right program could do for a person looking for 529 plans and estate plans.