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AI: Most people don’t know what it is, but we all need it

A large amount of companies don't actually know how to implement technology. How come?

According to a recent MIT Sloan report1, 81 percent of all enterprises do not understand what data is required for Artificial Intelligence (AI) or how to access it. But, 83 percent agree that driving AI is a strategic opportunity.

Say what?  Danielle Fava, Director of Innovation, TD Ameritrade Institutional, explains ahead of Wealth/Stack 2019 how we got to this situation and what you can do to improve it.

Most people can’t explain what AI is, how to build it, or how to use it, but we’re all pretty desperate to have it. This is the recipe for the makings of a buzz word. But, let’s not toss it away and hope it never comes back like other buzz words (I’m looking at you “growth hacking”). AI is pretty amazing and can really transform our industry.

The more advisors understand their clients’ behaviors, the better advisors can help them achieve their goals.

So, instead of trying to explain “how” it works, allow me to explore some of the ways AI can be used for the benefit of independent registered investment advisors, or RIAs.

Identifying patterns and predicting behavior

One thing that AI is really good at is identifying patterns and predicting behavior. Here are two ways this could be implemented for RIAs:

  1. Your next big referral. You just got a great referral from an existing client. Your client referred a fellow business owner that she knew from her book club. This isn’t new or ground-breaking; most of your new business comes from referrals. If you think about it, you can probably predict which clients are going to come through with quality referrals based on some personality and demographic factors like extroversion, large social circle, high net worth, and problem solver. Imagine for a moment, that a machine could figure out those same personality and demographic factors – plus more that you haven’t thought of – and predict which clients are most likely to give you your next big referral. This is well within the realm of AI’s capabilities. In fact, it’s squarely in its sweet spot.
  1. The content that you share. So, you learned from the open rate that most clients don’t look at your quarterly report, but they do seem to be watching your videos and opening links to articles you forward. You’ve made changes to your communication and content approach due to these percentages – you’re ahead of the game! Imagine, however, that AI could produce personalized content recommendations for each one of your individual client or prospects. You wouldn’t have to tailor your content approach for your whole client-base; you could easily tailor your content approach per client. This is also a possible feature of an AI-based system.

One important note

The more data the AI algorithms have, the better they can predict. So, if the AI is hooked into someone’s social activity, purchase history, and geo-location, the better it will be at measuring personality and demographics, and the smarter it will become at identifying and predicting patterns.

That’s why tech giants like Amazon and Google are some of the largest and most valuable companies in the world.

But, RIAs also possess a lot of data about their clients (and clients give their advisors data willingly and in a trusting relationship). So, could the data that RIAs possess about their clients be used by AI to perform this – and other – analysis, increasing their valuation as well? Yes, it can.

The more advisors understand their clients’ behaviors, the better advisors can help them achieve their goals. And I predict we’re about to see some creative ways technology companies will help advisors do just that.

Remember: you can’t spell RIA without AI!  

Dani will be delivering a keynote address at Wealth/Stack in Arizona. Find out more about her session.

Wealth/Stack began September 8 and ran until September 10. Find out more about the conference.



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TAGS: Technology
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