Will AI replace human investment decisions?
As the trend grows in prominence, people in the financial services space are increasingly asking, will intelligent technologies replace humans in the investment decision-making process? We asked members of Investec Wealth & Investment’s Global Investment Strategy Group for their opinion.
Augmented model offers best of both worlds
“Implementing investment strategies are seldom straightforward, though, because there are multiple influencing factors at play. This creates complex scenarios that sometimes require human experience to manage. It's also important to have humans in the process to offer an explanation to clients if something goes wrong,” explains Peers.
Ryan Friedman, Multi-manager Investments head, Investec Wealth & Investment, agrees that AI cannot fully replace the human element. “There will always be a need for human interactions to make the correct investment decision, whether it's making judgement calls or determining whether someone is a good capital allocator in a particular market environment, for example.”
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Creating opportunities, not threats
“I don’t perceive AI as a threat to portfolio and wealth management in its current form. In fact, I think AI will create numerous opportunities due to its ability to process more data at higher speeds. This functionality can deliver insights that could potentially assist investment managers to identify areas where they can harvest better returns.”
Chris Hills, Chief Investment Officer, Investec Wealth & Investment UK, agrees that the augmented intelligence model offers the greatest potential.
“Man and machine work better together than either in isolation. That's why I don’t think that AI will replace humans.”
The irreplaceable human touch
Additionally, the need for a human touch is even greater when it comes to managing wealth and private banking, believes Peers. “It’s not just about the investment for high net worth clients. Wealthy individuals still want to engage with a person, and their needs are multi-faceted, which requires a holistic approach that machines can not deliver in isolation.”
That's not to say we cannot augment technology into the process to automate, streamline and expedite mundane tasks that can enhance the customer experience, suggests Peers. “When AI can enhance transactional banking elements such as paying the bills and transferring money, humans can focus on the high-touch tasks that add the greatest value to clients.”
About the author
Patrick writes and edits content for Investec Wealth & Investment, and Corporate and Institutional Banking, including editing the Daily View, Monthly View and One Magazine - an online publication for Investec's Wealth clients. Patrick was a financial journalist for many years for publications such as Financial Mail, Finweek and Business Report. He holds a BA and a PDM (Bus.Admin.) both from Wits University.
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