Financial Advisors are already under the most intense scrutiny. Never have their every move, decision, interaction with clients been analyzed to this degree. And it’s going to get worse.
Photo Cred: The Protection Booth Podcast
Regulatory authorities are now considering the use of artificial intelligence (AI) and machine learning tools to enforce regulatory compliance.
Writing for CNBC Ryan Browne discusses UK regulator use of A.I., machine-learning to enforce financial compliance. Further commenting… Experts believe it could drastically reduce the cost of regulatory compliance, currently estimated to be around $80 billion globally.
And referencing. A report published last October by the University of Hong Kong identified the RegTech industry as a field capable of addressing risk in “real time” and increasing the efficiency of compliance.
Whilst the financial industry worldwide has taken a big hit in terms of its questionable practices, I wonder if AI is a step too far? Financial Advisors, like many businesses, are already bogged down in regulatory red tape. This next level scrutiny could put significant pressure on them to perform.
DNA Behavior has been across these regulatory issues for some time now. They know the importance of having a person complete a process of self-discovery. They understand the significance of revealing natural and instinctive behavior risks, and how they provide the firm assurance, they Know the Client at the deepest level to mitigate compliance risks.
AI is limited, it provides prompts and signposting after the event. The DNA Behavior Discovery process uncovers behavioral biases, risk patterns, decision-making approach and reactionary market movement pressure points in advance. This insight gives financial advisors access to the personality of their clients. It helps advisors use independently validated behavioral data to transform their role to the Wealth Mentor by:
- Putting their clients at the center of the financial planning process.
- Matching their advisory teams, clients, goals, and solutions.
- Using customized communication at all stages of the client lifecycle.
- Building tailored portfolios.
- Behaviorally managing client emotions.
- Enhancing compliance and reducing complaints.