Ready to jump into AI? First, manage risks

As AI gains popularity, more financial professionals are using this increasingly popular platform to automate tasks, manage client outreach and cultivate deeper client connections.

A survey from workforce software company UKG finds that 78 percent of C-suite leaders say their organization is using AI, estimating that 56 percent of their workforce is using the tool to automate or augment tasks. Nearly half (49 percent) of the leaders surveyed say AI has benefitted their organization more than their employees.

Although AI adoption rates are increasing, it’s important to consider the potential risks of integrating these tools into your practice. 

“AI is increasingly capable, but AI isn’t flawless,” says Shawn Swaner, Athene’s Chief Technology Officer.
“Anyone integrating AI into business processes and systems must be careful about protecting and securing their client information. Accuracy in algorithms may result in errors or biased results.”

But before we outline the potential pitfalls of using AI, let’s review the ways that AI can help increase efficiency, allowing you time to provide more personalized service to clients. Financial professionals are using AI to help them:

1. Automate time-consuming tasks such as research, trends and report generation
2. Develop marketing and client outreach materials such as blog posts, social media posts and client emails
3. Train new hires and create ongoing learning content

The message here: Don’t let the promise of AI distract you from the critical risks you may face when using it. Yes, the goal is to leverage AI to help free up time to provide more tailored services for your clients. But you can’t overlook the potential drawbacks of using AI, including compliance and data privacy risks as well as concerns about bias and false claims. Before you jump in, here are three risks to be aware of:

1. Data security and privacy concerns

Keep in mind that any information you share with an AI platform is collected, processed, and then stored in cloud-enabled servers, which means that data could be compromised if there is a data breach. You could unintentionally expose your client’s confidential information to cyber thieves as well as violate privacy regulations.

Always refrain from using names, addresses, financial data such as account numbers, or other identifiable information when you are using AI platforms. 

2. Regulatory compliance risks

We probably don’t need to tell you that the financial services industry is heavily regulated and that compliance requirements are constantly changing. For these reasons alone, it’s important not to use AI as a substitute for your own experience and insights. Even the smartest technology can’t replace humans when it comes to understanding fluctuating compliance regulations, staying updated on changes and making sure everyone in your firm follows its rules for doing business. 

3. Unproven and unverified analysis

One of AI’s biggest benefits is also its largest shortcoming. Although AI can analyze large amounts of information and identify trends more quickly than you can, the technology is not always foolproof. AI also can’t pick up on nuances the way you can. 

If you are going to incorporate AI into your practice, you need to check the accuracy and completeness of AI-generated information. It’s important to remember that AI combs the internet to collect data. As a result, inaccuracies and biases can creep into the information AI uses to generate content.

Using AI to create communications and reports can be a timesaver, but don’t ignore your own judgement and expertise when it comes to qualitative analysis. 

Do’s and don’ts

Here are some quick dos and don’ts for managing the risks of using AI.

• Don’t: Use names, addresses, financial data such as account numbers, or other identifiable information, when you are using AI platforms. 
• Don’t: Ignore your own judgment and expertise when it comes to qualitative analysis.
• Do: Consider that AI-generated materials may inadvertently be skewed against certain demographics.
• Do: Question whether an AI-generated output is perpetuating a bias. 

While there are many ways AI can help you better serve your clients, you need to pay attention to the potential risks posed by the technology. Make sure content generated by any AI tools you use is compliant, accurate and aligns with applicable company policies.

The bottom line is this: If you invest time and resources into learning what AI can do and understand its shortcomings, AI can help you save time which can give you the opportunity to create a stronger connection with your clients.

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