The third Wealthtech Summit conference in Monaco, jointly organised by DIATN and AMAF, the leading event in the Principality for exploring innovations and emerging technological trends applied to wealth management, this year addressed the subject of ‘Artificial Intelligence and Investment: the new frontiers of finance’. The speeches were very much appreciated by the participants, more than 100 professionals gathered for this3rd edition, from the welcome address by AMAF President Robert LAURE, to the speeches by specialists and the presentation by Mr GENTA, Interministerial Delegate for Attractiveness and Digital Transition. Jean-Philippe DESBIOLLES, Managing Director of IBM: ‘We have moved from a deterministic to a probabilistic world’. All the speakers agreed in illustrating the new industrial revolution we are facing, in the Principality as in other international financial centres.
In this context, Charles THURAT, AI Platform manager at BNP Paribas Wealth Management, spoke about the applications of AI in wealth management and investment. We caught up with him.
In a few words, could you describe your career at BNP Paribas?
I joined BNP Paribas in 2018. I spent just over two years in Personal Finance, in the analytics teams before joining the IPS teams where I coordinated activities related to technological subjects such as Artificial Intelligence (AI), data analytics, and emerging technologies such as blockchain or quantum computing. Last December, I joined Wealth Management's Data & AI teams, to build, prioritise and execute the entity's AI strategy.
What role does artificial intelligence play in investment strategies today?
Artificial intelligence became an essential tool in investment strategies long before the general public became aware of it. AI has been used in the financial sector for years, particularly in the investment strategies it drives or assists.
However, it is important to note that AI, despite its advances, does not replace humans. It helps to analyse large amounts of data, to detect signals, but it cannot yet compete with human intuition, what I call ‘flair’ or inspiration. Even though investment funds driven entirely by AI exist - especially in the United States and Asia - they do not necessarily outperform funds managed by humans. AI learns from past data, but still lacks creativity and originality.
Can AI help to reduce risk in investment strategies?
AI can indeed play a role in reducing risk, in several ways. [CT1]
For example, it is very useful in assessing risk when proposing a product or service. It helps to analyse the complex situation of each customer, taking into account the increasing diversity of their assets and investments.
Finally, at market level, AI allows us to detect signals of instability before they materialise, helping us to take more defensive positions if necessary.
A more forward-looking aspect of AI involves imagining new risk scenarios. It can draw inspiration from the past and generate economic, geopolitical or societal scenarios that we hadn't necessarily thought of. This means we can better anticipate exceptional events, but also react more effectively.
Does AI also make it possible to personalise wealth management offerings?
Absolutely. It enables us to analyse our customers' assets in great detail and adapt our proposals according to their risk appetite, their life plans, or their exposure to certain asset classes or industries. Thanks to AI, we are able to detect weak signals, information about a customer's future plans or events that could affect their wealth. This enables us to be proactive and propose offers even before the customer asks for them. We can also analyse the customer's ecosystem, be it their family, their holdings in companies, or their centres of interest, and thus anticipate specific opportunities or needs.
But doesn't this raise ethical questions about the use of all this data?
This is an absolutely crucial question. AI is an extremely powerful tool, but like any tool, it must be used responsibly. At BNP Paribas, we attach particular importance to the protection, confidentiality and processing of data, in compliance with all the standards and regulations in force, including the RGPD (General Data Protection Regulation) . The bank also undertakes not to share personal data for commercial purposes.
We strongly believe that AI cannot replace human contact. Direct contact with the customer is essential, and we believe that this will be even truer in the future. As AI becomes increasingly ubiquitous, being able to interact with a human advisor, an expert, will be all the more important if the advisor is a trusted partner. We firmly believe that AI should serve humans, not replace them.
How do you see the impact of fintechs on the traditional banking sector?
Fintechs have brought a new form of competition, but that's part of the natural evolutionary cycles in any industry.
For BNP Paribas, this is an opportunity to reinvent itself and innovate, whether by collaborating with these fintechs or by integrating their solutions into our own offerings. We are working with many young companies, particularly in the field of AI technologies, to combine their agility with our expertise. This enables us to stay at the cutting edge of innovation while offering our customers the stability and continuity that young fintechs, by definition, find harder to guarantee.
In Wealth Management, a long-term relationship with the customer is essential. Wealthy customers are looking for partners who can support them for decades, and fintechs, although successful in some areas, do not yet have the capacity to ensure this long-term stability. This is where traditional banks have a clear advantage.
Does the emergence of AI mean that staff in the banking sector will need more training?
Absolutely. AI has been democratised, particularly with the arrival of generative models such as ChatGPT. But with this democratisation comes a need for training, because it's not enough to ask AI questions. You need to know how to formulate the right questions, how to interpret the answers and, above all, how to assess their quality. Generative AIs are not infallible and can ‘hallucinate’, i.e. provide incorrect or inconsistent answers.
We are actively working on setting up training courses so that all our employees can master AI and use it effectively on a daily basis. This is a fundamental issue, because AI is here to stay! So we need to train our teams not only to use these technologies, but also to be able to evolve towards the new roles that AI will create or transform.
