The Bryan Ellis Investing Letter – Don’t trust your financial advisor? Maybe a robot could do a better job. Investment firm UBS Group has recently decided that it will give artificial intelligence a try when it comes to advising the firm’s wealthiest clients, turning to Singapore-based Sqreem Technologies to develop an artificial intelligence (AI) program that will “extract the information most relevant to an individual client from an explosion of data and deliver this tailored content to clients’ mobile phones, iPads, and other digital devices.” UBS Group hopes that the new technology will make obtaining sound financial advice as simple and familiar a process as using eBay or Amazon (Bank Investment Consultant).
UBS Group, which the world’s biggest wealth manager, described the problem with personal, human advisors as an inability to handle an abundance of information. “We have data! Too much of it!” the company announced in a web posting in which it described a competition to develop the AI program. The winning program crawls through 85 million individual behavior patterns online in Singapore and then matches different types of behaviors with the best types of wealth management products. Sqreem and UBS Group emphasized that the entire process is anonymous, and “at no point in time are we involved in identifying individual clients.”
Although UBS may be the first to launch a competition for the development of its own custom AI program, it is definitely not alone when it comes to its belief in the use of large-scale behavioral patterns to identify investment opportunities. According to one report, more than 70 percent of financial institutions in North America believe that “big data analytics” will give them a “significant advantage” over their competition and fully 90 percent “believe that successful big data initiatives will determine the winners of the future” (Bloomberg).
Would you turn to AI for financial advice? Are you comfortable with “big data analytics” at your financial investment firm?
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