Artificial Intelligence in Financial Services: Convenience or Threat?

Episode 87 May 11, 2023 00:18:57
Artificial Intelligence in Financial Services: Convenience or Threat?
Annuity Straight Talk
Artificial Intelligence in Financial Services: Convenience or Threat?

May 11 2023 | 00:18:57


Show Notes

The use of artificial intelligence (AI) in financial services has sparked a heated debate. While some argue that it can bring about convenience and improve operations, others see it as a potential threat that could lead to job displacement, biased decision-making, and increased vulnerability to cyber-attacks. 

In this episode, Bryan will share his informed perspective on the use of AI in financial systems and annuities, offering his unique insights and analysis on this important issue.

What You’ll Learn from This Episode:

[2:08] Can AI in financial services be considered a convenience or a potential threat? 

[5:40] To improve efficiency and reduce expenses, various major tech companies are leveraging AI for business automation. 

[8:42] Tips on how to locate annuity recommendations effectively. 

[9:12] What are the potential outcomes of receiving automated annuity recommendations from a system? 

[10:08] Comparing suitability standards to fiduciary standards. 

[10:39] Is it feasible for artificial intelligence to arrive at a decision that meets fiduciary standards? 

[14:39] Understanding the risks associated with AI.

Key Quotes:

[8:20] "I would not be surprised when one day they will be replacing agents with computers."


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Episode Transcript

Speaker 1 00:00:05 This is Annuity Straight Talk. Since 2008, your host Brian Anderson, has helped clients nationwide navigate the complex market for annuities. With Brian's assistance, hundreds of clients have achieved a profitable and secure retirement. I would know because Brian has answered many of my questions concerning annuities and retirement planning so that you can benefit as well. Let's get started. Here's Brian. Speaker 2 00:00:48 Hello and welcome to the Annuity Straight Talk podcast, episode number 87. My name is Brian Anderson, founder and creator of All Things annuity. Straight Started in 2008. We're going on 15 years of this website, 20 years in the business. Got answers to all of your questions. Taking a break from our regularly scheduled programming of annuities in retirement planning, market analysis when we have a good guest. I've actually got a really cool guest coming up for you in the next couple of weeks. I'm very excited about it and I hope you guys will be as well. It's honestly something that's like a lot of people ask me, Hey, what advice would you give my kids? This guy that's coming on is kind of like more of a, I don't know, he's, he's just, he's a sharp guy. Uh, he's got a big following. He does a lot of really good stuff on uh, social media and all those things and it's more geared for accumulation of assets and trying to really kill it in the accumulation phase. Speaker 2 00:01:38 So I thought it'd be a good diversion. Anyway, we'll get into that later, but for the purposes of this one, I'm talking about something that is becoming a bigger and bigger deal. I've thought about doing this for a while and it seems like almost every day I see an article about it and so I decided finally it's like, you know, just cut it and do it now. And as I was writing this, I worked on it for a couple of days and pieces and parts and every day something new. But we're talking about artificial intelligence in financial services, convenience or threat, maybe a little of both. So I've got a newsletter written, I just finished it. Perfect timing for lighting cuz the sun came out. It's been a little rainy and I really like it. Before we get started, I want to remind everyone to like subscribe or comment on the podcast. Speaker 2 00:02:23 You can use your favorite podcast platforms. You can send me a message via email after your, on my email list or you can comment, subscribe thumbs up on YouTube as well. So there's videos, there's list, you know, listen to it, you can watch it. No visual aid if you like to kinda look me in the eye or see what I'm all about and my little spot here in Montana, that's fine as well, but I don't know if it's on everyone else's minds is just kind of floating around in the news. But artificial intelligence is here whether you like it or not. Once you realize that it could become a problem, then it's probably already too late. Whatever we have at our disposal as consumers is probably just the tip of the iceberg relative to what the tech companies, government agencies around the world have at their disposal. Speaker 2 00:03:07 Now I'm gonna be careful to not dive into rabbit holes here. I'm gonna talk about the things I do know, things I suspect and and what makes sense to me, but it's probably gonna get outta control and why not? It's been the subject to several sci-fi movies in the past. It's funny what you'd look at in the eighties or nineties and say, oh wow, that's crazy. But it's actually happening right now. A lot of leaders in the tech industry have urged Elon Musk being one of 'em, Hey, slow this thing down. Really don't really know what kind of power it's gonna have. That doesn't mean they're stopping, they're probably just being quiet about what they do. So most people are familiar with the earliest form of AI that I know of. There's other ones, actually this is an interesting story about the beginning of annuity Straight Speaker 2 00:03:47 You guys all know that I created a substantial amount of content, I did a lot of writing to, to start this website cuz I had to get information on it somewhere and it didn't exist elsewhere. It was in, you know, books and magazines and I kinda had to repurpose it. I had to learn a lot of things and so I could write everything in my own words. And at the very beginning, one of the ways that was popular in some places was to, it was called article spinning. So I could write a thousand word article and then you could give it to this computer program and there was articles, it would spin the article and it'd give you say a hundred versions of it. So if you could get a hundred versions of your article out there, then obviously you're gonna get more traffic. You're gonna dominate that keyword when people search for it, right? Speaker 2 00:04:28 But even the second version of that letter came up with really weird synonyms and all that stuff and it was not, it was garbage, total garbage. Okay, anyway, so was that AI or I don't really know if that qualifies, but it was kind of weird. Never used it, played with it a little bit. I'm like that is total junk. So, but the mo earliest form I can think of that everybody might be familiar with is Siri. Anybody use that female voice on smartphones can answer any question, give you directions to the address. They've got Siri devices for homes ready for service at any point in time it can turn your heat on, turn the lights on. Hey Siri, we got some friends coming over and need a great appetizer or cocktail recipe. Got anything, boom right away. Or you got a song stuck in your head, you wanna dance with your wife <laugh>, hey play that song we love, boom, it's there. Speaker 2 00:05:18 Okay, just ask Siri, you'll have it right away. That's kind of the, the one that's been around for a long time. I honestly, you know, I've got it on my phone, I hate the voice, I turn it off all the time. That's just me. But you can walk through an airport or just through a cafe and you can hear people like talking to Siri all the time. So several major tech companies are using AI to automate business to improve efficiency and cut costs. Computers and robots don't need income health insurance or workman's comp. So cutting jobs is gonna save those companies a lot of money, I don't believe. And it stands to reason that's not gonna be very good for employment and it only further reinforces kind of my idea. Again, step and stay trying to stay shy of the rabbit hole, but some of the wealthiest people in the world run those companies, those big companies. Speaker 2 00:06:04 And if the average employees kind of outta luck there, well that's just another way that some of the wealthiest companies are gonna be able to aggregate more wealth. So convenience comes at a cost and this one, to be honest with you, looks about to be about the most expensive one for the average individual. Now a lot of you guys are close to retirement in retirement, okay for you, but you need to keep an eye on what it means. Okay? This brings me to my point about financial services for a long time now, and I don't know how many years large brokerage companies have been using what's called the robo-advisor. You answer a long series of questions, it's gonna design and manage a portfolio for you. You don't have to talk to a person, you don't have to pay management fees. It's all automated, objective and efficient. Speaker 2 00:06:48 With little Nuno subjective human intervention, it comes back to whoever designed the software and created the algorithm. So someone's opinion is behind it. Someone actually has to program to say do this, do that, right? So if a large management firm gives you a computerized set of instructions for portfolio management, you'll likely end up with a mix of investments that leans toward what's best for the company. Not to pick on anyone specifically, but if Edward Jones has a robo-advisor, then it is likely to recommend Edward Jones sponsored mutual funds, ETFs, and bonds. Makes sense to me. How about you guys? Okay, so I've established myself as a a bit of a contrarian in the industry. I share my thoughts on that a lot. That's why I have to provide extra justification and explanation for the strategies I recommend, the products I recommend and all that. I think that automated process leaves something to be desired for most retirees. Speaker 2 00:07:40 Now I've seen robo-advisor plans and they'll automatically rebalance it's a piece of cake, you know, stocks and bonds and there's a lot of shortfalls and there's a lot of personal preference that goes into that as well. But if that's kind of replaced a lot of the investment managers, then I have to think that my job is possibly in jeopardy as well as brokerage firms, more and more are warming up to the idea of using annuities. Insurance companies may well go along with it just to gain a larger market share in every business. Financial service is included. Cost cutting is a popular thing in the modern world. I would not be surprised if one day they try to replace agents with computers. I mean it's already happened in a lot of ways. Investment industry property and casualty insurance. You don't even have to talk to anybody, you can go online and get a car insurance policy, right? Speaker 2 00:08:28 It already kind of works that way, like given the recommendations that seem to be the most popular. And I've talked to you guys a lot about how I find annuity recommendations. I ask a few people, if we're really serious in getting to the end of something, I'll ask the opinion of a few people. If I call one company, the one company is gonna tell me, hey, this is the product I like or this is the product that works. If I say, okay, these guys are 61, they're retired in two years and they need guaranteed income, they're gonna say, well this is the product we have. This is the best you should do this. And I've already told you that's not the way to find the best. You gotta go to an objective source like one of the databases that I subscribed to, to verify whether that truly is the best. Speaker 2 00:09:07 So what's gonna happen if you get this automated system where they're recommending annuities, then you're gonna have, let's say you're with Schwab and Schwab starts, you know, has the annuities that they bring into their management portfolio on an automated system say it's like New York Life and MetLife. Okay, well I've already showed you guys and dozens of examples why New York Life and MetLife great companies are not always gonna be the best thing at at the right time, but you're gonna be limited to what the partnership with those two companies have. So you're not gonna be able to shop the entire market and it's gonna take a huge move in order to really do that. And I'm not saying that's not possible, but it's not gonna be the first step, that's for sure. Right now they're letting guys like me participate. But that may not always be the case. Speaker 2 00:09:51 So take a side note here. I'm gonna remind you the difference between the suitability and fiduciary standards. The suitability standard means finding a solution that is suitable for a client in regards to the unique variables of each person. And this is the broadest range of options you'll find. Yeah, this is okay, it's suitable, go ahead. So an annuity might be suitable and real estate might be suitable and bonds might be suitable, but what is the best? That's suitability the fiduciary standard is finding a solution that is in the best interest of the client. Whether it's between an annuity bonds and real estate. You're gonna have to take some subjective variables into account. It produces a very specific and limited option with greater overall benefit because it's in your best interests. Will artificial intelligence be able to come to a conclusion that fits this fiduciary standard? Speaker 2 00:10:43 I do not think it's all that possible without human interaction. That's my opinion. Okay, I bring up this topic because we played with it on my website. We're always trying to create content and somebody threw the idea, hey you should use ai. We can create long form content in seconds, meaning a thousand, 1500, 2000 words as opposed to me spending, you know, several hours developing an idea. It's not the same for you guys, number one, cuz it's not gonna read the same. Number two, it's not my voice and there's not someone that you can call out that's at the end of it. So if you have a question about what I write, you can ask me and I'll explain it to you or you may uncover something that I left out and I'd be happy to include it or offer a correction. So not the same for you, but the search engine algorithms are fine with it. Speaker 2 00:11:28 This is gonna result in like what you're able to see on the internet. If you don't think the big company's already controlling what you see, then you're wrong cuz they are, they pick and choose what they think is the answer to your question. That's why things like this podcast and independent publishing are very, very important because I can speak in my voice, I can give you my explanation and you can decide whether that works for you. The one that we used and one of the most popular ones is chat G P T and I think there's a lot of people out there using it to create content. You're already likely getting opposing information or recommendations based on content generated by artificial intelligence. It just the way it is, sorry, again, like I said, once you realize it, it's too late. It's gonna become more and more ubiquitous as time goes by and definitely sooner rather than later then you have to decide whether that's what you want. Speaker 2 00:12:16 Who do you wanna work with, who do you wanna listen to? Do you want a computer programmer who writes a program that has a robot answering your question? So I don't know. The interesting thing, the creepiest thing I've seen so far is we had an AI program recreate my voice. So for anyone who doesn't know, there's some who do. Jeremy is the guy, he's my buddy who does all the marketing and advertising for annuity straight He's the one guy that works with me. I have a couple other guys at contract on web development stuff, so no offense to them, but he's been around for a while and anyway, he's the reason most of you guys found me. We spent a lot of time creating content based on your questions. You know, the feedback I get and the case studies that people ask me to design or the ones that I see that they bring to me from other advisors. Speaker 2 00:13:04 So he went to the AI system he was playing with and gave the system a command to listen to a few seconds of one of my podcasts and then create an audio recording of my voice reading a portion of one of my newsletters. So he said, Hey listen to this voice for I don't know what it was, three five seconds and then here's a paragraph and we want you to make an audio file of that. And almost instantly it came back with an audio clip about a minute and a half long. It sounded like my voice reading what I wrote with about a 90% match that was barely different from my real voice. The voice was the same, the inflections were a little bit different. It sounded like I was kind of disinterested just reading the letter and not really in, you know, not really trying to put too much into it, that kind of thing. Speaker 2 00:13:51 So, but I listened to it and I thought, whoa, that's insane. So makes me a little, that makes me a little bit nervous since my voice is out there and I'll just take the time right now to say, if you ever get a phone call saying me asking you for something insanely crazy, it's not me. I'm telling you right now. I saw another clip, somebody reporting that fraudsters have gotten ai, if you have videos or any audio files out there, one guy said that his grandparents were called and it was in his voice saying, I was in a car wreck and I really need money right now. Can you wire it to this spot? Fortunately someone could verify him independently was there. Anyway, another thing you gotta be concerned about. So I put myself out there, this is something you need to know before you do anything and make sure that you understand the threat of that as well. Speaker 2 00:14:38 In that instance, it was kind of spooky to me to have my voice matched so quickly, so easily and a little bit more training for the system and no one would have a clue or be able to tell the difference. I don't like the idea of a computer having any control over the content I post or the recommendations I make today. I'm making a promise to everyone here that comes to annuity straight talk. It will always remain a purely authentic product of my own creation. If one day that makes me outdated and uncompetitive in comparison to computer generated advisors, then so be it. If you get in before that happens, then you'll always have me in your corner. If you think that's farfetched, then consider that. I've heard from several people that have a handful of hometown banks and credit unions who have converted to fully automated tellers, no human interaction in the bank anymore. Speaker 2 00:15:32 I said a little bit about this before, I have a strong suspicion bordering on confirmation that there are some of my competitors in this market that use artificial intelligence to create content very quickly. It's not their own thoughts or years of work. Rather it's a computer taking a series of commands and finishing the job in a few seconds. My website has been a work in progress for nearly 15 years. Every single word that's on there is something that I typed, but it could be copied, repurposed, reworded by artificial intelligence in a flash and I will fight like hell keep ownership of what's mine and you need to understand if that it works for your benefit as well. So if you'd rather work with a robot than leave now and go get your information elsewhere, it's not gonna be that hard to find cuz it's all over the place For anyone else who's okay with a human brain and a beating heart, I intend to make sure this is the last place that's going to fall. Speaker 2 00:16:18 So thank you so much. I don't wanna scare anybody, you just have to understand it so you can navigate it and figure out where you want it, where you don't and it's not gonna be here. If you appreciate the convenience of artificial intelligence, oh, this is so easy, by all means, go for it. I got a lot of heat and continue to over the years for saying I just never will do business with someone I can't sit down with face-to-face. That's fine. Those same people are gonna have a really hard time dealing with a computer. So it's not to scare you, it's just to inform you and say, listen, you gotta know what's out there and figure out how you want to deal with it. If you don't wanna deal with it, find the places that it's not gonna exist. And annuity straight talk is one of those places. Speaker 2 00:16:57 Anyway, this has been episode 87, artificial Intelligence in Financial Services, convenience or Threat. I think it's a little bit of both and you, like I said, pick and choose what you want to use. Anyhow, thank you so much for joining me. I would appreciate it if you subscribe to your favorite podcast platform or the YouTube channel. Give it a thumbs up comment. If you can tell your friends about it, share it. That's another way we're gonna defeat the computer system is to make this as popular as possible. A lot of people like it and a lot of people can use it. So anyway, I really appreciate the opportunity for the continued communication with you guys. Bring me your case studies, bring me your ideas and your questions and I would be happy to make them the subject of a future podcast. Anyway, I'm looking forward to, uh, a couple of good guests in the next couple of weeks. Not quite sure what the next topic is gonna be, but I will be back to you next week with episode 88. All right guys, thank you so much and have a great day. Bye. Speaker 1 00:18:00 You have been listening to Annuity Stray Talk. The proceeding information is for informational and educational purposes only and does not represent tax, legal or investment advice. The views expressed by guests on this program are their own and do not necessarily reflect the views of annuity, straight talk or its partners. No information presented today should be acted upon without meeting with the qualified and licensed professional. It's important that you read all insurance contract disclosures carefully before making a purchase. Decision guarantees are based on the financial strength and claims pain ability of the insurance company.

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