Learn about GenAI's role in reshaping Canada's advisory scene, balancing innovation, and regulation
In a roundtable article with Wealth Professional, Ian Tam, director of investment research at Morningstar Canada, noted that Generative AI (GenAI) has dramatically changed the landscape of Canadian wealth management.
Just over a year after the emergence of ChatGPT, the adoption of these technologies has surged, enhancing global economic efficiencies, and introducing new capabilities within the financial advice sector in Canada.
However, Tam also stresses the importance of a cautious approach when integrating GenAI due to its profound implications.
The use of GenAI in Canadian financial institutions is still at an early stage, according to Chris Patterson, head of AI governance and advisory at CIBC.
Despite significant interest and the transformative potential of GenAI, the approach remains deliberately measured to ensure responsible understanding and application of the technology.
In Ontario’s capital markets, AI systems are mainly enhancing existing services rather than creating new ones, as highlighted by Levin Karg, manager of modernization regulation at the Ontario Securities Commission.
These systems are deployed in a phased approach, with generative AI tools currently used more for low-risk applications.
Generative AI also plays a critical role in improving advisor software usability, as described by Steven Berger, director of product management at Morningstar.
The integration of a GenAI-powered chatbot within Morningstar’s advisor workstation helps streamline access to product features and supports advisors, allowing them to concentrate on their primary responsibilities.
Regulatory challenges are significant, with concerns about the potential for fraud and the need for equitable access to training datasets to prevent data monopolization.
Karg raises the concern of AI-enabled fraud, necessitating stringent controls and the interpretability of AI models to ensure transparency and fairness.
Morningstar’s Responsible AI Council, detailed by Berger, plays a pivotal role in overseeing the ethical use of AI tools, ensuring they align with legal, privacy, and reputational standards.
Looking ahead, Patterson envisions a future where GenAI will continue to evolve, enhancing productivity and compliance in advisory workflows, particularly in automating the know-your-client process.
This would allow advisors to focus more on delivering personalized advice, emphasizing the irreplaceable value of human interaction in the advisory process.
In the next decade, Karg predicts that GenAI will be seamlessly integrated into advisory services, possibly shifting the way advisors interact with clients, including the potential use of AI-driven virtual advisors and wearable technology to enhance the personalization and accessibility of advice.
This illustrates a future where technology significantly augments the efficiency and personalization of financial advisory services without diminishing the crucial role of human insight.
