Andrea Haskell and Val Srinivas from Deloitte discuss the impact of generative AI on investment banking, including automating tasks like news analysis and M&A. They explore the implications on talent, risk management, and technology adoption, emphasizing the importance of control points for reliable output and the potential for augmented technologies to elevate workers' focus on higher-value work.
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Quick takeaways
The use of Generative AI tools in investment banking can improve front office activities by up to 35%, reducing manual work and allowing junior analysts to focus on higher-value tasks.
Integrating Generative AI into existing AI infrastructure provides opportunities for enhanced productivity and revenue growth in investment banking, but investment banks must adapt and maintain a competitive edge as the technology advances rapidly.
Deep dives
The Productivity Boost in Investment Banking with Gen AI
The Deloitte report highlights that investment banking could see a significant boost in productivity through the use of Generative AI. Front office activities such as research reports, pitchbooks, and deal structures could be improved by 27% to 35% with the help of Gen AI tools. The report emphasizes that this technology can minimize the manual work of junior analysts, allowing them to focus on higher-value tasks. The main focus is on improving productivity and efficiency, but revenue growth opportunities are also expected in the future.
Challenges and Opportunities in Implementing Gen AI in Investment Banking
Integration of Gen AI into existing AI infrastructure in investment banking poses challenges and opportunities. The report suggests that investment banks should look at combining Gen AI with existing AI systems to enhance productivity and potentially unlock revenue growth. However, it highlights the need for adapting and maintaining a competitive edge as the technology advances rapidly. Contextualizing the technology and maintaining real-time capabilities, while ensuring limited output time spans and trustworthiness, are important focal points for investment banks.
Considerations for Adopting Gen AI in Investment Banking
As investment banks plan to adopt Gen AI, factors such as talent and operating model become critical considerations. The report indicates the need to upskill, reskill, and hire differently to align with the changing nature of work due to generative AI. It emphasizes the role of humans in the loop and the importance of critical thinking. The report also highlights the significance of governance, risk management, and considering the ethical implications of generative AI outputs. Mapping use cases against business value and complexity can help in establishing priorities for implementation.
Today’s guests are Andrea Haskell, Principal of Strategy and Analytics at Deloitte Consulting, and Val Srinivas, Research Leader in Banking and Capital Markets for Deloitte. They join Emerj CEO and Head of Research Daniel Faggella to discuss the trends and challenges detailed in a new report from Deloitte on generative AI’s impact on investment banking. From using new #genAI tools for news analysis and summarization in financial workflows to looking beyond trading, such as M&A, advisory, and debt issuance – the trio explores AI adoption and its impact on workflows, talent, and risk management. This episode is sponsored by Deloitte. Learn how brands work with Emerj and other Emerj Media options at emerj.com/ad1.
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