NEWS:

Wealth Professional, August 29, 2023. RBC says use of AI requires careful handling as poll shows skeptics. Canada’s largest lender says that artificial intelligence is revolutionizing financial management but accepts that it must be used responsibly and transparently. RBC is committed to demonstrating how the technology can help Canadians manage their money including automated savings and budgeting, but it also knows that handling clients’ most personal and valuable data is not something that can be taken lightly. The bank’s new research found that 75% of respondents are skeptical about AI’s abilities with older Canadians proving harder to convince of its value to them. While 65% of 18-34-year-olds said using AI to remind them to pay bills, this drops to 38% among 35-44s and to just 11% for over 55s. Using AI for automated savings is valued by 71% of younger Canadians but just 28% of over 55s.

Globe and Mail, August 29, 2023. Artificial Intelligence (AI) Software Revenue Is Soaring Toward $14 Trillion. Artificial intelligence (AI) promises to boost labor output across most industries. In fact, a study conducted by exchange-traded fund organizer Ark Invest concluded that automation tools could more than double the productivity of the average knowledge worker. That selling point could propel the value of the AI software market to $14 trillion by 2030, up from $1 trillion in 2021. Investors eager to strike it rich by tapping into the growing demand for AI software should consider the Vanguard S&P 500 ETF(NYSEMKT: VOO), especially as an add-on to a portfolio of stocks. Here’s why.

PMYNTS, August 2023. Banks Train AI as the New Financial Advisers. Banking’s next chapter is written in AI and bound in innovation. The banking industry’s lexicon is getting an artificial intelligence (AI) makeover. In this new era, “conversation” transcends a mere chat, fraud “detection” connotes foresight and “digital natives” have AI on speed dial. As industry chatbots morph into personalized advisers and fraud protection turns prescient, every facet of banking is poised for a rebuild. This transformation is not merely a splash of futurism — it is reshaping everything from internal operations to consumer banking experiences.

Kiplinger, August 25, 2023. Should You Take Financial Planning Advice From AI? – Artificial intelligence can’t think, counsel and strategize like a financial adviser, but that doesn’t mean there’s no place for it in financial planning.

The Banker, August 25, 2023. High interest rates hinder AI adoption. Banks on both sides of the Atlantic are struggling to invest in tech, but US lenders are at risk of falling behind.

Microsoft Start, August 24, 2023. Can AI really change the payments industry? Opinion by Douglas Blakey Artificial intelligence (AI) is impacting numerous industries, including financial services, where it offers potential increases in efficiency and potential enhancements in capabilities for financial institutions in banking, capital markets, insurance and payment processing. Another of AI’s potentially transformative effects is how it can help people with their financial planning. Many financial planners have integrated AI into their business, using it for services such as client communications, marketing and tax planning. But as helpful as AI can be, it shouldn’t replace your financial adviser. Using AI in finance may also present some risks and negatives, and it’s important for consumers and businesses to evaluate the pros and cons of the technology’s use — which also emphasizes how vital the adviser’s role still is.

FT.com, August 23, 2023 [read free]. Supply chain shortages delay tech sector’s AI bonanza. Taiwan Semiconductor Manufacturing Company, the world’s largest contract chipmaker by revenues and exclusive producer of Nvidia’s cutting-edge AI processors, predicted last month that demand for AI server chips would grow by almost 50 per cent annually for the next five years. However, it said this was not enough to offset downward pressures from the global tech slump caused by an economic downturn. In the US, cloud service providers such as Microsoft, Amazon and Google, which account for the lion’s share of the global server market, are switching their focus to building up their AI infrastructure.“The weak overall economic environment is challenging for the US CSPs,” said Angela Hsiang, vice-president at KGI, a Taipei-based brokerage. “Since in AI servers every component needs to be upgraded, the price is a lot higher. The CSPs are aggressively expanding in AI servers, but that was not on the cards when capital expenditure budgets were drafted, so that expansion is cannibalising other spending.”

Yahoo Finance, August 23, 2023. Goldman Sachs is just as bullish on AI as big tech. Marco Argenti, Goldman Sachs’s chief information officer, calls AI “probably one of the biggest revolutions or changes that I have ever seen. We believe that AI could be a profound disrupter not only of our industry, but all digital and all information and knowledge industries in general,” he told Yahoo Finance Live. This has been a growing refrain from executives outside of technology. Wendy’s is using an AI chatbot in its drive-thrus. Cosmetics and skin care company Oddity, which became public this month, uses AI to develop new products and to match consumers with makeup. And other big financial firms are no stranger to AI – Bank of America is reportedly using it, and virtual reality, to help train new employees.

Barron’s via MSN, August 23, 2023. Can AI Replace Your Fund Manager? In Time, Yes. So far, there are only 11 AI-run exchange-traded funds, based on a Barron’s screening. Others, though, are probably employing AI behind the scenes. “If I were in an asset manager’s shoes right now, I’d be all over looking at AI, but in more of the perspective of how do I strip some cost out of my business and make it run more efficiently?” says Lee Davidson, Morningstar’s chief analytics officer.

Forbes, August 21, 2023. Are Large Language Models Finance’s Second Shot At AI? Ever since AI first started making headlines in finance, it has been a story of great promise and anticipation—and limited real-world impact. As far back as 2018, the industry’s cautious approach to AI adoption was coming in for comment. Little appears to have changed since then. In the U.K., for example, the Bank of England/FCA 2022 survey on machine learning (ML) adoption in finance found that while 72% of responding firms were using or developing ML applications, the median number of such applications was hovering around 20 to 30—progress, but hardly transformational.

Coin Telegraph, August 21, 2023. Convergence of AI and blockchain: Unlocking new possibilities. Overall, the combination of AI and blockchain represents a massive paradigm shift in modern technology and presents significant opportunities for lives and industries to improve.

Nasdaq, August 16, 2023. The Future of Finance: AI Meets Tokenization. Federal Reserve Governor Christopher J. Waller recently gave a speech titled: “Innovations and the Future of Finance,” explicitly focusing on two emerging technologies, namely Tokenization and Artificial Intelligence (AI). He said, “the world is rapidly changing, and we need to be open to the potential benefits of innovation.” After ChatGPT sparked a technological arms-race among the big tech companies, it is not surprising that Waller decided to focus on AI as one of the emerging technologies to bring advanced innovative solutions to the financial industry. It might, though, come as a surprise that the Fed is appreciating the benefits of blockchain technology, the technology that underlines tokenization (and cryptocurrencies like Bitcoin). But the Fed has acknowledged the benefits of blockchain technology, and like other central banks around the world, has been experimenting with Central Bank Digital Currency (CBDC) through several initiatives.