Will Artificial Intelligence give personal finance advisors a run for their money? No, this is not the sub-plot for a Hollywood dystopian movie about the perils of inflation and money management from a robot.
On 11th May, JPMorgan Chase applied to trademark a product called IndexGPT. This is fundamentally a ChatGPT-like service but one that will help us better understand how and where to invest our money.
Why IndexGPT and what can it help you with?
According to the filing, IndexGPT will simplify “financial investment in the field of securities; funds investment; financial affairs and monetary affairs, namely, financial information and analysis services for securities investing”.
In other words, the software service will:
Use AI to help customers learn the various investment products in the market,
List which are the best suitable options based on their current scenario,
Explain why these financial solutions should be considered and,
How to invest in them
This is particularly path-breaking because there are multiple investment options across global markets today. Many are working for multinational companies and do not necessarily understand or have time to learn about jargon-filled taxation laws, stock options forms, and insurance policy documentation, among other things. A few prompts and this software can provide a comprehensive overview and give out tailored financial solutions.
So, does that mean it will put financial advisors out of business?
The short answer is no. The longer answer gives more context.
How can it simplify trade discussions with your accountant?
Think of IndexGPT as an innovative application on your screen that will demonstrate the various shades and brands of lipstick currently in the market. It will help you understand how you will look and what outfits you can pair it with. It then depends on you whether you want to take the second opinion of your mum, your friend, or your partner. But it is when you understand the technicalities, composition, and longevity of the product that you can have these discussions.
In this case, you will be able to schedule your money or business meetings with your trusted account or personal finance advisor without sounding clueless.
Also, as seen in the case of ChatGPT, AI systems can sometimes produce inaccurate information. It is often unintentional and based on modeling defects. Big Tech firms are currently heavily investing in eliminating bugs. But it is another reason why you must consult with your financial advisor about the pennies you want to trade to minimise risk and optimise your profits.
What about privacy and data regulation?
Another concern persists around privacy and data regulation. It is weird enough that social media apps and phone devices listen to our conversations. This information is then “sold” out to third parties who push their products onto our feed which might not be of any use to us.
So, it is only natural to be wary about IndexGPT collecting intel about our financial investments. There can be a host of moral and ethical dilemmas across different services and products, from stock manipulation, inside trading, to creation of a bubble market, among other things.
But these are all dependent on how JPMorgan Chase develops and launches IndexGPT. Governments, financial institutions, and regulatory authorities will have to document and monitor the clear use of such systems.
It can be particularly challenging in a country like India, where data protection laws are murky. The taxation system is complex, and market regulation is not water-tight. RBI and SEBI are already struggling to regulate the finfluencers who are dispelling “easy stock tips'' and masterclass sessions on mutual funds without appropriate disclosures and disclaimers in place.
An AI-assisted personal finance advisor will only add to the mix.
When will IndexGPT be shipped?
JPMorgan filed for the trademark of IndexGPT on 11th May. It can hope to seek approval from the U.S. Patent and Trademark Office in about a year. Once approval is sought, the financial giant has to develop the product in about three years.