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AI is reshaping financial advice

Multiply’s Chief Technology Officer tells us what AI is doing in financial services, and why we should embrace it.

AI is revolutionising financial advice by enhancing digital transformation and personalisation. But human oversight and traditional systems remain crucial for accuracy and compliance.

8 years ago, Multiply began offering fully digital financial advice. The company provides digital advice solutions for financial advisors, pension companies, and insurance providers. We invited Chief Technology Officer Mike Curtis along to one of our recent Wednesday Wisdom online sessions, to chat about the real world applications of AI in financial advice and the wider industry.

Watch the recording of this Wednesday Wisdom webinar

Say hello to the AI wave

Why is everyone talking about AI now? The catalyst was a 2017 paper on large language models (LLMs). Technologies like ChatGPT, Google’s Gemini, and Microsoft’s Copilot all stem from this breakthrough. Mike believes the conversation is not just about new AI, but also about long-standing technologies reaching a critical mass.

One striking example is a major insurance company that recently managed to integrate its data from various silos—pensions, insurance, and investments—using decades-old technology. This integration enabled them to understand their customers’ product holdings better, something previously unattainable.

Real-world applications of AI

So, what can AI do in consumer finance today? Mike highlights several use cases:

  • Digital fact-finding: AI simplifies the process of gathering customer information, even from varied and complex documents like pension statements.
  • Semantic search: this means looking at the meaning and intent behind a search query. AI enhances customer support by enabling more accurate searches through large databases of information.
  • Personalisation: AI can tailor customer communications, making them more engaging and relevant.

“AI opens up the realm of natural language, making digital transformation easier and more engaging for customers.”

Challenges and limitations

Despite the hype, AI is not a silver bullet. LLMs often generate mistakes or ‘hallucinations’ – as tech review site The Verge discussed. Mike argues that solving this issue would require a breakthrough as significant as the original development of LLMs. In finance, where accuracy is paramount, this limitation is particularly critical. Rather than try to fix the hallucination issue right now, we should recognise it and find ways to deal with it.

Maintaining old systems

Mike stresses that traditional systems are still useful. Established rules-based systems, especially for risk and compliance checks, remain vital. AI can complement these systems but won’t replace them. For instance, in fraud-detection, it’s essential to have deterministic, well-tested systems.

“Old systems are not obsolete. They hold valuable, tested rules and compliance measures essential for risk management.”

The future of AI in finance

Mike sees AI continuing to evolve, interacting with existing systems and enhancing customer experiences. However, he emphasises that the key to integrating AI successfully lies in understanding its limitations and building systems that tolerate faults. This means combining human oversight with AI capabilities, to check that the technology’s benefits outweigh its risks.

Getting started with AI

Mike advises financial firms to embrace experimentation with AI. After all, customers are already using it, as we have written about before. He believes companies should use AI to enhance customer experiences, but always with a focus on regulatory compliance and risk management.

AI holds enormous potential, but its true value lies in thoughtful, integrated applications that enhance rather than replace traditional systems. The future of financial advice is likely to see AI and human expertise working hand-in-hand, creating better, more efficient services for customers.

You can read more about making the most of AI in Multiply’s white paper.