OpenAI’s ChatGPT has turbo-charged the rise of artificial intelligence. Individuals now have free access to world-leading generative AI models, and businesses are being forced to think about how to respond to these new capabilities. There is frenzied speculation about how this could change our lives and jobs. Tech titans such as Microsoft, Meta, and Google are moving quickly to integrate Large Language Models (LLMs) into their products, as are organizations in medicine, law, science, and more.
In this whitepaper, we present the facts, opportunities, and risks for asset managers, including a playbook for executives to navigate this new environment. Specifically, we:
- Examine the technical features of ChatGPT and models like it. We demystify the underlying technology, considering the model architecture and how they generate their outputs.
- Propose use cases and the possible benefits for an asset management organization. Removing barriers to powerful machine learning will commoditize simple tasks such as content retrieval and will free up (for example) investment and product teams to focus on market research and ideation. We look at use cases we are hearing about from our clients and assess LLMs and OpenAI’s GPT models’ features to identify where we see the most value.
- Consider the limitations of ChatGPT and other LLMs to highlight potential risks. ChatGPT is highly impressive, but it is not a panacea. LLMs such as ChatGPT have limitations in their current form, including data exposure, non-factual responses, unknowability, and bias. This can make them unsuitable for some use cases (such as regulated disclosures) without appropriate guardrails and may introduce business risk.
- Outline an ‘Executive Playbook’ for working with LLMs and OpenAI’s GPT models. We identify 7 considerations to help asset managers prepare for and navigate these new emerging AI capabilities and others like them. This includes how to assess models like GPT and their suitability for your business. We stress the importance of approaching your data science & analytics capabilities holistically and focusing on business needs, outlining a framework for evolving your business and AI/ML capabilities along with these new developments.
We believe LLMs like ChatGPT will ultimately be boosts for workplace productivity, particularly as they are integrated with existing enterprise applications like Office 365 and Salesforce. However, the models’ limitations make them less suitable for use cases such as generating proprietary insight for the investment process or automating regulated disclosures. Asset managers should explore and get ready for this new technology but do so with caution.
In our first whitepaper in February 2023, we set out Alpha’s framework for building a successful data science & analytics capability. The components of user experience, the insight ‘engine’, and strong data foundations all remain valid, and we emphasize these across this new paper. We recommend asset managers do the same, and we’d be delighted to discuss the approach, as well as our analytics technology solutions to help accelerate and guide your journey.
Alpha FMC has extensive experience working with asset managers to explore where and how data science and analytics can empower their business. For more information on how Alpha FMC can help your organization, please contact us here.