In a groundbreaking development, global asset management giant BlackRock announced its plans to introduce generative AI-powered tools for employees and clients. This move marks a significant step forward in embracing the potential of artificial intelligence within the financial industry.
GenAI Tools for Enhanced Efficiency
BlackRock‘s GenAI tools include an AI-powered chatbot designed to address simple customer inquiries effectively. Additionally, the company is unveiling a set of AI-powered ‘copilots’ that will generate ‘first drafts’ to enhance employee productivity. These tools are poised to reshape the landscape of financial services, with the company outlining an impressive USD 9.1 trillion approach to generative AI in its internal memo.
Democratising Coding with GenAI
One of the most notable aspects of BlackRock’s vision is its commitment to ‘democratise coding’ by utilising generative AI. The firm aims to make coding accessible by allowing users to communicate in their natural language. At the same time, AI models generate the code, positioning English as the coding language of the future. This forward-thinking approach aligns with BlackRock’s determination to develop its proprietary AI tools, leveraging its vast data and technology resources rather than relying on external sources.
Data as a Valuable Asset
BlackRock’s tech platform, Aladdin, which generated an impressive USD 1.4 billion in revenue in 2022, is utilised by over 1,000 external firms for various investment processes. This extensive data pool positions BlackRock uniquely in harnessing AI’s power for financial innovation.
A ‘Walled Garden’ Approach
BlackRock’s strategy includes a ‘walled garden’ approach to generative AI, meaning its AI tools will exclusively rely on its proprietary data. This data will not be shared with external GenAI models, reinforcing BlackRock’s commitment to maintaining the integrity of its data and technology ecosystem.
The Cryptocurrency Connection
In June 2023, BlackRock took a significant step towards the cryptocurrency market by applying to the Securities and Exchange Commission (SEC) for a spot bitcoin exchange-traded fund (ETF). If approved, this ETF would become one of the first publicly traded spot bitcoin ETFs in the United States. This move could potentially offer a more accessible option for the majority of Americans who have not yet ventured into the world of cryptocurrency.
Challenges on the Horizon
While the approval of BlackRock’s spot bitcoin ETF holds promise, it remains uncertain due to previous rejections of similar proposals over concerns about unregulated exchanges and manipulation risks. Furthermore, the SEC’s proposed custody rules for asset managers could add complexity to the equation.
A Global Trend
BlackRock’s foray into the realm of AI is not isolated. Across the financial industry, there is a growing trend towards implementing generative AI tools. Mastercard recently unveiled a GenAI retail assistant, Commerzbank is developing a GenAI-powered virtual assistant, and a UK Finance survey indicated that most UK banks are piloting GenAI technology.
The Promise of GenAI
BlackRock firmly believes that GenAI will revolutionise how people interact with technology, enhance productivity, and redefine clients’ expectations regarding the simplicity and timeliness of interactions. By harnessing AI’s capabilities, BlackRock aims to reduce fixed costs and boost margins, paving the way for more significant productivity gains in future years.
A Glimpse into the Future
As BlackRock blazes a trail with its GenAI tools, the financial industry and the wider world are set to witness a transformation in how technology and finance intersect. With its sights set on innovation, efficiency, and accessibility, BlackRock is poised to redefine finance’s future through artificial intelligence.
