How AI Will Cause Robo-Advice to Completely Outperform Human Advice
By Michal Rozanski
Founder and CEO, Empirica S.A.
Most financial advisors are in deep denial about robo-advice. They say that they need human interaction in order to understand the nuances of the financial lives of their customers. And their clients value the human touch. They’re wrong. Soon robo-advice will be much more efficient than human advice ever was.
In this chapter, we will share the results of our analysis on the most important areas where the application of machine learning will have the greatest impact in taking wealth management to the next level.
What AI Is and Why You Should Care
“Computers can only do what they are programmed to do.” Let us explain why this is a huge misconception, which was only valid because of the limited processing power and memory capacity of computers. Most advanced programs which mimic specialized intelligences, known as expert systems, were indeed programmed around a set of rules based on the knowledge of specialists within the problem’s domain. There was no real intelligence, there were only programmed rules. But there is another way to program computers which makes them work more similarly to the functions of the human brain. It is based on showing the program examples of how certain problems can be solved and what results are expected. In this way, computers equipped with enough processing power, memory and storage are able to recognize objects in photographs, drive ...
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