AI In Finance: Why We Must Preserve Our Humanity

Whether you’re thrilled at the idea of Artificial Intelligence (AI) or the mere thought of it fills you with absolute dread, the truth is, it’s here to stay.

Even those excited about ChatGPT and other machine learning software have expressed concern regarding the future of AI and its potential to surpass uniquely human skills.

As it permeates all corners of the globe, there now is a growing need to remember our own humanity by emphasising a need for qualities such as empathy, ethics, and critical thinking, particularly within the financial services sector. Being a highly data-driven industry, we’ve been in the direct firing line of AI developments, and because there’s high value involved (wealth!), it’s imperative to keep our finger on the pulse when it comes to taking care of our clients.

The world is changing quickly, and not everyone is going to be able to keep up. Uncertainty is back on the agenda. So if like me, you operate within the realm of economics and investing, your top priority should be supporting your client base with authentic non-imitated compassion – something only us humans are capable of.

Humans are still heroes

With the acceleration of fintech (now worth $179 billion), fiduciary institutions and professionals will inevitably need to come to grips with the integration of artificial intelligence along the value chain. But that said, finance is not just about numbers and transactions. It is also about people.

This is why it has never been more critical to maintain our sense of humanity when engaging with our clients, colleagues and even the work that we do on a daily basis. While AI in finance can streamline processes, it still lacks the ability to genuinely empathise from a real lived perspective. And this is important because building and maintaining strong relationships in business still requires a human touch and a sense of emotional intelligence to navigate complex situations in the real world.

Here’s something to remember: without the use of AI software, humans are still capable of incredible things. Take Sir Edmond Hillary and Tenzing Norgay, the first people to scale Mount Everest in 1953 with little more than woollen suits and wood-handled ice axes. They relied solely on their human skills and personal experience to get them there.

In modern times, and more related to the field of investment, two key longstanding leaders are Warren Buffett and Charlie Munger of Berkshire Hathaway. This impressive conglomerate has seen a 19.8% compounded annual gain from its inception in 1965 to 2022, compared to 9.9% for the S&P 500 Index. This was all well before the AI tools we have now – and more computing power in the palm of our hands than The Orion (the original space shuttle). They are examples of great investors and individuals whose long term success (and formidable insight) continues to inspire. At the age of 99, in Munger’s case, they can still punt a whole roomful of valuable anecdotes and truisms you couldn’t get from the latest AI.

Speaking on the rise of artificial intelligence, Munger recently captured this sentiment by stating: “I am personally sceptical of some of the hype that’s gone into artificial intelligence. I think old-fashioned intelligence works pretty well.” To which Buffett further added: “When something can do all kinds of things, I get a little bit worried. We won’t be able to uninvent it. AI can change everything in the world, except how men think and behave.”

Striking the right balance

In May 2023, the ‘godfather of AI’, Geoffrey Hinton, announced his resignation from Google in protest of the company’s renewed efforts to take on OpenAI. He said: “They used to be very careful, but things have changed.” He also recently stated that AI is a more significant threat to humanity than climate change.

But with artificial intelligence being here already, there’s no denying there are ways it can be used for good and to help solve some of the world’s biggest problems. Crimefighting AI can help detect the insidious problem of online scams and financial crimes, but I’m also quite impressed with the advancements in the medical sphere. I recently read an article on a machine learning model that has a 70-75% accuracy rate for early detection of Alzheimer’s dementia.

With these types of breakthroughs in mind, AI does have a place at the table, especially in the world of finance. It can help by enhancing data processing, risk management and taking care of repetitive tasks so that we humans can focus on what we’re good at, what we enjoy, and what makes us fulfilled.

By approaching this new age with a sense of cautious optimism, the future of AI in finance lies in striking a balance between the power of machines and our human intuition. By not allowing ourselves to become complacent and setting boundaries for these tools, we can ensure that those we seek to serve receive the care, support, and personalised advice needed to make informed decisions to achieve their financial goals.

A purely algorithmic approach to finance, devoid of human oversight, can erode trust and breed scepticism which is not at all want we want as wealth managers! It can also lead to a loss of human connection if misused or relied on too much, and this is why keeping our humanity intact is crucial for the responsible and sustainable development of AI in finance. By harnessing it to enhance human decision-making rather than relying on it blindly, finance professionals can leverage their expertise to navigate uncertainties, anticipate risks, and identify new opportunities.

If you currently work in this sector or are concerned about managing your wealth in this rapidly changing landscape, I’m here to help. Connect with me on LinkedIn or drop me a message here, and I’ll get back to you in 24 hours.

I’m Giles Maynard. I provide individual investment and wealth management services for private clients and companies. I have been trusted by clients, large and small to manage, protect, and preserve their wealth. How can I help you with yours?