Is artificial intelligence in banking a threat or an opportunity? “An opportunity, but it will be a threat if we ignore it,” said Vincent Fraser, President of Croesus, at the Fintech Forum 2024.
The major annual event for the Canadian financial technology sector took place last September in Montreal. An audience of investors, advisors, and technology experts gathered to hear Mr. Fraser’s vision, along with other experts, on the integration of AI in financial practices.
As a pioneer in the Canadian WealthTech sector, Croesus has been developing wealth management solutions since 1987. With the creation of Croesus Lab in 2018, the company has positioned itself at the forefront of innovation in this field and is actively conducting research on AI technologies.
“My mandate is to propel Croesus to a new stage of growth focused on innovation to meet the needs of our clients,” explained Mr. Fraser. “AI is a new field, but extremely stimulating. We are eager to continue our developments.”
Leverage AI in wealth management
According to Mr. Fraser, AI is impacting all players in wealth management: financial advisors, portfolio managers, businesses, and investors.
“Humans will remain at the heart of wealth management. For financial advisors, the goal of using AI-driven solution is to improve productivity in order to minimise time spent on administrative tasks and maximise time spent with clients,” he said.
The Croesus Lab is working on co-pilots capable of taking notes, simplifying research, and generating account summaries.
“AI could notably be used in decision support tools to identify events, issue proposals for customising financial models, understand risk profiles, etc.,” adds Mr. Fraser.
For businesses, AI could contribute to risk management, particularly in terms of compliance. Algorithms will be able to anticipate potential problems and ensure regulatory compliance.
Finally, for investors, “AI can improve communication with advisors and simplify financial information, which can sometimes be complex,” said Mr. Fraser.
One of the advantages of AI that Mr. Fraser highlighted during the panel is its ease of use. “Natural language interactions with our solutions simplify research,” he said.
The challenges of AI in finance
Despite its potential, the integration of AI solutions in wealth management poses certain challenges.
“Generative AI poses new challenges, particularly in terms of misinformation and hallucinations,” rightly pointed out Rheia Khalaf, Director of Partnerships at MILA. “It is important to verify the information provided by AI and ensure its accuracy to avoid any risk of error and damage to reputation.”
Experts at Croesus Lab believe that AI applications will never be able to replace the work of human advisors. According to them, AI systems will remain a tool capable of making recommendations, but it must be entrusted to competent professionals who are capable of interpreting the results. Humans will therefore always retain a central role in supervision and final decision-making in finance.
During the panel, Mr. Fraser insisted on the regulatory challenges, particularly the question of responsibility for decisions made by AI. “Currently, regulations stipulate that the advisor and the company are responsible for investment decisions, but what will happen with AI?” he wonders.
Data confidentiality and security is another issue that was raised during the panel. Croesus Lab is a pioneer in the creation of synthetic data sets. This will allow AI models to be trained on a database that simulates reality and thus eliminate any risk of real data breaches.
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