Banking giant Morgan Stanley has unveiled its new internal AI assistant, marking a new era for the finance sector. The AI program, named “AI @ Morgan Stanley Assistant,” is designed to help financial advisors and support staff access research reports and documents, saving time on administrative tasks. It is built on OpenAI’s GPT-4 software and aims to revolutionize client interactions and bring efficiencies to advisor practices. Morgan Stanley plans to further incorporate AI tools, including a pilot program called Debrief that automatically summarizes client meetings.
The launch of Morgan Stanley’s AI assistant comes as other major banks, such as JPMorgan, Citigroup, and Goldman Sachs, are also exploring the use of generative AI models. These banks recognize the massive opportunities for partnership between banking and generative AI. JPMorgan, for example, is investing $1 billion in AI and data analytics and predicts a return of $1.5 billion in realized value for 2023 alone. McKinsey estimates that AI could create up to $1 trillion of additional value for the global banking sector each year.
Morgan Stanley’s move to adopt generative AI is a part of a larger trend in the sector. Banks are actively embracing AI technologies to gain a competitive edge and enhance their customer service. JPMorgan has been working on a ChatGPT-like AI model to pick investments for customers, while Citigroup has been developing generative AI models for the past three years. The Evident AI Index ranks JPMorgan as the top bank in terms of preparedness for the AI revolution.
OpenAI, the company behind the GPT-4 software used by Morgan Stanley, recently introduced an enterprise tier for businesses, including access to GPT-4 with faster performance and no usage caps. OpenAI’s model is not trained on the data submitted by enterprise clients, allowing them to train their own custom models for specific use cases.
While the adoption of AI in banking presents significant opportunities, there are also risks to consider. Concerns include the training dataset used for the AI models and the potential for hallucinations, where the AI model generates incorrect information. However, the potential benefits far outweigh the risks, as AI has the potential to add tremendous value to the banking industry.
In addition to the AI news, Morgan Stanley recently faced a lawsuit from private equity firms seeking at least $750 million. The firms allege that they were defrauded in a high-speed rail company investment. Morgan Stanley denies the claims, stating that they do not believe the allegations have merit.
The announcement of Morgan Stanley’s AI assistant was positively received by the market, with the bank’s share price rising by 0.4% on the day of the news. The stock has also seen a slight increase in premarket trading. This development comes after a challenging period for the banking sector, with the COVID-19 pandemic causing significant disruptions.
Overall, Morgan Stanley’s launch of its AI assistant sets the stage for other banks to follow suit. The potential value added by AI in the banking sector is vast, and we can expect to see more banking-related AI announcements in the future. As these technologies continue to evolve, they have the potential to revolutionize the way the finance sector operates.
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