6 ways to utilize AI in your practice

Key takeaways:

• A Nationwide survey found that 7 in 10 mid-market business owners and 30% of small business owners are considering utilizing AI technology to make strategic business decisions.
• Generative AI can be used to augment daily tasks with a human in the loop. 
• AI can be used in your practice for predictive analytics, risk management, portfolio optimizations, and customer engagement.

10/08/24 – Everyone’s talking about AI and how it’s changing the world. ChatGPT, a chatbot from OpenAI, was the fastest growing application in history, overtaking popular social media sites with its explosive roll out in early 2023.¹ Businesses are also quickly adopting AI to write copy, create images, streamline processes, code, schedule, and more—the possibilities are endless. According to a Nationwide business owners survey, more than 7 in 10 mid-market business owners and 30% of small business owners are considering using AI technology to help make strategic business decisions.² You can read about Nationwide’s AI journey here.

As a financial professional, you can harness the power of AI in your own practice to enhance operations, analyze trends, or open new avenues for creative solutions, all while providing better service to clients. The potential for AI to contribute an astonishing $7 trillion to global economic growth³  over the next decade underscores its importance in staying competitive. With impressive applications and outcomes—like the rapid development of the COVID-19 vaccine—it’s clear that AI stands to transform how financial services operate. But how can you realistically utilize AI for financial planning in your practice?

How to use AI in your practice

AI offers a range of practical applications that can potentially be leveraged to benefit your clients and streamline work:

1. Enhance Client Advisory Services

AI-driven analytics can sift through vast amounts of market data to provide real-time insights and predictive analytics. By integrating these tools, you can deliver more personalized investment advice, backed by data-driven insights that account for broader market trends and individual client needs.

2. Risk Management and Fraud Detection

AI can significantly enhance risk management through advanced modeling techniques that detect and mitigate potential threats. Machine learning algorithms can identify unusual patterns and anomalies in transaction data, thereby flagging potential fraud much earlier than traditional methods. This not only protects clients' assets but also builds trust and reliability in your services.

3. Portfolio Management Optimization

For portfolio managers, financial planning with AI can offer optimized investment strategies by analyzing diverse datasets including financial markets, economic indicators, and even social media sentiments. These sophisticated analytics enable the construction of more resilient, diversified portfolios aimed at superior risk-adjusted returns.

4. Customer Service Automation

AI-powered chatbots and virtual assistants can handle routine client inquiries, freeing up humans for more complex interactions. These AI tools can provide instant responses, handle multiple queries simultaneously, and operate round-the-clock, thus enhancing customer satisfaction and operational efficiency.

5. Predictive Maintenance for Financial Systems

AI also helps in maintaining the robust health of financial systems by predicting when maintenance is needed. Machine learning models can forecast IT infrastructure needs, helping to prevent downtimes and ensuring that systems operate smoothly and efficiently.

6. Customer Engagement and Marketing

Generative AI can help you create marketing materials for your practice and can help you brainstorm, draft copy, create subject lines, perform keyword research, write blogs, design infographics and video, and more. We’ll talk more about Generative AI later in this blog. 

Understanding AI: an actionable glossary

With the rapid development of AI technology, there’s a lot to learn! Let’s start with the basics here: 

Artificial intelligence: Leverages computers and machines to mimic the problem-solving and decision-making capabilities of the human mind.

Traditional AI: Focuses on analyzing historical data and making future numeric predictions. As AI evolves, there are maturity levels with differing levels of complexity.

• General AI: Systems that comprehend, learn, and perform intellectual tasks much like humans.
• Narrow AI: Systems that are designed to complete a specific task.

Generative AI: Refers to the type of algorithms that can create content, such as text, images, or videos, by learning patterns from a given dataset and generating new, similar instances of data.

Machine Learning (ML): A subset of AI that allows computers to learn from data and improve their performance over time without being explicitly programmed.

Natural Language Processing (NLP): A field of AI that focuses on the interaction between computers and human languages. It enables computers to understand, interpret, and generate human language in a valuable way.

Large Language Models (LLM): A type of machine learning model that can understand and generate human-like language. It works by estimating the probability of a word or sequence of words occurring within a longer sequence of words. LLMs are trained on immense amounts of data, making them capable of performing a wide range of tasks such as generating text, translating languages, and answering questions.

3 tips for getting started with AI

1. Have a plan

Starting with a goal in mind can help you step into the world of AI with confidence. Identifying areas where you’d like to see increased productivity or provide more value to your clients can help you get started. Once you identify these targets, you can pursue the AI technology to best assist you. Don’t be afraid to ask for help when beginning your journey with AI—there are many experts in the field that you can consult with, and various companies offer demos and tools that you can take advantage of to get started.

2. Keep a human in the loop

Generative AI can help you combine the rapid efficiency of machines with human empathy, judgment, and intuition. Although many people believe in the power of AI to increase productivity, AI simply isn’t a replacement for human intelligence. A human-in-the-loop approach is most likely necessary, where people work alongside AI to ensure quality, accuracy, and ethical standards.

3. Iterate and Adapt

Generative AI is a versatile tool that requires ongoing adaptation. You can experiment with various models, data sources, and parameters to find the best fit for your unique needs, continuously monitoring and measuring the impact on outcomes in your practice. Staying informed about the latest advancements in generative AI is essential, and seeking continual feedback from clients can help you tailor your approach.

Choosing Generative AI tools for your practice

Generative AI specifically has gotten a lot of buzz because it can help you generate content through text, images, voice, etc. You’ve probably utilized generative AI whether you’ve realized it or not—such as performing a google search or engaging with a customer service chatbot. In your own practice, you can think of this type of AI as a way to augment your own intelligence—generative AI generally isn’t used to replace the work done by a human. It can be helpful to think through your daily list of tasks and pinpoint areas where you’d like to see increased productivity, and then see where generative AI could be used to optimize those processes. Here are some questions to ask yourself when choosing which generative AI platform is right for your practice:

1. Will I be doing content creation?
2. Will this be used to communicate with clients?
3. Will the function be internal, or external?
4. Will there be a human in the loop?

What’s to come?

In short, AI technology isn’t going away. While there may be continuing legal and ethical⁴ hurdles for the use of AI in the future, it’s clear that businesses across industries are rapidly adopting this technology. By understanding AI's capabilities and integrating them thoughtfully into your practice, you can provide more personalized, efficient, and secure financial services to your clients. So, are you ready to harness the power of AI in your practice?