As the co-founder of an artificial intelligence company, Gege Gatt says the biggest challenge he faces is convincing people that AI does not always generate significant job losses.
However, when asked whether AI could generate job losses in the financial advice industry, Mr Gatt says it certainly could.
For financial advisers, the common-use case of AI is in the engagement processBut the founder of chatbot company EBO, says it is mostly the lesser-skilled administrator jobs that may be affected.
His view is that AI may generate job losses while at the same time creating jobs in other areas.
Mr Gatt stresses AI is useful to the financial advice community in several ways.
He says it can help build adviser-client relationships, as AI is available 24/7, which is useful for financial advisers when they switch off in the evening, and it can be instrumental in helping advisers meet their compliance obligations.
Supplementing humans
According to Mr Gatt, compliance obligations can often result in “grey areas”. He adds that AI can be used to achieve consistency and act as a virtual agent to supplement the human relationship.
Mr Gatt says: “Conversations flow in many languages, and advisers have to follow it.”
He adds: “Conversations are full of data points but they are not always picked up due to [business constraints], and limited attention spans, among other factors.”
He says AI could augment financial advisers’ capabilities without replacing them, suggesting that both technology and human advice can work in tandem.
“For financial advisers, the common-use case of AI is in the engagement process.”
Mr Gatt founded EBO in 2017 as he wanted to a mechanism that would focus on automating human communication.
He says two factors led to the foundation of EBO. The first of these was the “intersection of communications, which is a social science, and technology, which is a hard science”.
He says the second factor was democratisation, which makes the benefits of technology available to all companies.
“I am a firm believer that digital is about change, not about tech,” says Mr Gatt.
He adds: “[The notion] is that AI is traditionally – and mostly – available to larger companies.
“But customer communications are a critical part of the business component [of any company]. That changes the economics of the company.”
He points out that almost half of jobs in financial services (45 per cent) can be delegated to AI.
“It is a challenge to speak to a board of directors and explain that some jobs will be lost and new jobs will be created,” he says. “It will be hard to negotiate complex social relationships with AI.”
Recent research from YouGov, commissioned by EBO, shows that more than one in four (76 per cent) NHS users would be happy to receive an automated reminder from an AI-powered virtual assistant, compared with 58 per cent who would be happy to be contacted by a human.
Mr Gatt says the findings of the research also apply for the financial advice industry, as he says most clients would like to use a virtual agent to supplement the human adviser relationship.
AI has been a common theme in the advice profession in recent years.
A 2016 survey by the Association of Professional Financial Advisers, found that 69 per cent of advisers had turned away clients in the previous 12 months because they did not have the capacity to take them on.
Risking obsolescence
The CFA Institute has also said advisers “risk obsolescence” if they fail to adapt and acquire new skills, with a poll indicating most advisers feel their role may be obsolete in the next 10 years.
The institute warned of a complex environment in which advisers must adapt to survive and embrace a degree of AI.
As for EBO, Mr Gatt says the company’s five-year plan is to have a “value-created exit strategy”. He explains that one cannot exit a company without having created value.
Before setting up EBO, Mr Gatt was director at Maltese technology company Icon, a position he still holds. He was also previously vice-president at the Malta IT Law Association.
However, Mr Gatt says the proudest moment of his career has been participating in the first hackathon in Vatican City – an institution not always associated as being at the vanguard of modernity.
This hackathon is called Humanity 2.0. The project involves using technology to solve issues of social inclusion, interfaith dialogue and resources for refugees. It brings thinkers to Vatican City to solve key existential issues.
But Mr Gatt concedes that AI does have limitations: “AI is good at managing information but it is not great at managing knowledge.”
So perhaps advisers are safe, for now.
Saloni Sardana is features writer at FTAdviser and Financial Adviser
