The Financial Conduct Authority’s decision to launch a Supercharged Sandbox to allow firms to experiment with artificial intelligence could be transformative for the wealth management industry, says Avaloq.
On Monday (9 June), the city watchdog announced that firms will have the opportunity to experiment with AI using NVIDIA accelerated computing and NVIDIA AI Enterprise software.
The new Supercharged Sandbox will give firms access to better data, technical expertise and regulatory support to speed up innovation. The FCA said the collaboration will help those that want to test AI ideas but who lack the capabilities to do so.
It is open to any financial services firm looking to innovate and experiment with AI.
Suman Rao, managing director for the UK and Ireland at Avaloq, said: “The launch of a Supercharged Sandbox to help firms experiment with AI could be transformative for the wealth management industry, enabling smaller players, who have previously been held back by lack of expertise and access to data, to finally get on board and explore the potential of AI in a supported, low-risk environment.”
Avaloq’s research found that 87% of wealth managers across the UK believe AI will be integral to their future work and the UK wealth management as a whole.
Rao said: “With the Sandbox promoting AI development in a safe and regulated environment, it will also go some way in providing reassurance to clients, many of whom are currently reluctant to trust AI when it comes to making investment decisions and financial planning.”
However, she noted that clients continue to value the human touch and it’s unlikely that they will ever feel comfortable delegating decisions completely to AI.
“With AI development showing no sign of slowing down, the challenge for wealth managers now lies in establishing the correct balance between leveraging the benefits of AI while also maintaining human touch that clients value most. Those who can do this most effectively will be best positioned to lead as the industry enters a more innovative and automated future,” Rao added.
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