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ChatGPT: Which prompts can make wealth management smarter?

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AI chatbot ChatGPT could stand to bring a raft of benefits to wealth management, from investment analysis to risk management, if given the right prompts.

ChatGPT, or the Chat Generative Pretrained Transformer, to give its full name, is the latest artificial intelligence development that has been grabbing headlines in recent months.

ChatGPT is referred to as a ‘generative AI’, which is a subcategory of artificial intelligence focusing on algorithms to generate content, such as images, text or sounds, instead of simply recognising or classifying it. So far, the potential for such technology appears unrealised.

Rezwan Shafique, Capco

For wealth advisors, this leads to the question, how can generative AI be used to make wealth management smarter?

Rezwan Shafique, partner of financial services consultancy Capco APAC, shared his insights on this question with Asian Private Banker. Currently based in Hong Kong, Shafique previously worked at banks including Credit Suisse and Citi in London.

“Increasingly we are seeing more enquiries from wealth management firms on how their financial advisors can leverage generative AI to offer improved advice to clients. We are seeing this trend, especially in Hong Kong and Singapore where firms are investing in digital transformations,” he noted.

In the current volatile economic and geo-political conditions, Shafique said, there are increasing demands on wealth managers to be well-informed in order to navigate clients toward their objectives.

“Digitally enabled financial advisors will serve clients better in this environment. Utilising new technologies such as generative AI models has the potential to empower advisors so that they can offer greater portfolio insights, develop bespoke investment options, and curate an interactive environment for personalised advice,” he explained.

Generative AI solutions

From a family office perspective, CIOs are often faced with a myriad of enquiries from beneficial owners, which could be streamlined by generative AI-backed solutions, according to Shafique.

“From, what is the correlation of the various investments we have? To, do I have overexposure to a particular stock? How can generative AI be leveraged to answer such questions dynamically and omit the need to hire more financial analysts into family office functions, is a recent question from a client. We are seeing some interesting solutions come to market, particularly from fintech firms with generative AI being embedded into their solutions,” Shafique noted. “It’s completely doable right now.”

From a risk management perspective, he added, generative AI can help access the investment exposure against trading patterns and other market indicators by analysing the large volumes of data involved. “This assumes that the underlying data is of good quality, which is essential for delivering meaningful benefits, something many of our clients find challenging,” he commented.

However, the adoption of generative AI could be concerning for the massive data set from the internet and other sources that enable tools like ChatGPT to be highly adaptable, generating highly natural and coherent language responses just like a real human. The data could also include the volume of data in the banking industry.

“I think generative AI makes us smarter, but we must note the growing concerns around proprietary data, copyright and data privacy infringements which are likely to become real points of friction in the coming months,” he remarked.

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