Morgan Stanley pioneers AI assistant usage in major banks

  • Stock Market News
Morgan Stanley pioneers AI assistant usage in major banks
Credit: © Reuters.

In an industry-first move, Morgan Stanley has unveiled an artificial intelligence (AI) assistant developed with OpenAI technology, according to a Tuesday announcement. The AI tool, dubbed 'AI @ Morgan Stanley Assistant', is intended to streamline administrative and research tasks for financial advisors and support staff by providing access to over 100,000 research reports and documents.

The AI model was created using OpenAI's GPT-4 software. Morgan Stanley was among the early testers of OpenAI’s custom AI programs. This follows the launch of OpenAI's enterprise tier in August, which provides businesses with GPT-4 access featuring no usage caps, faster performance, and API credits. The pricing tier is adjusted according to the size and requirements of the enterprise client.

Despite this innovation, concerns persist regarding the training dataset used for ChatGPT-4 due to potential issues with copyrighted material and factual inaccuracies. Notably, OpenAI's enterprise tier does not train on data submitted by companies but instead allows clients to train their own models for various tasks including customer service, research, and administration.

Morgan Stanley's introduction of an AI assistant comes as other banking giants such as JPMorgan, Citigroup (NYSE: C ), and Goldman Sachs also delve into generative AI technology. JPMorgan has committed $1 billion towards AI and data analytics in 2023, with plans to develop a ChatGPT-like AI model for selecting investments for customers. Meanwhile, Citigroup has been working on generative AI models for three years.

McKinsey projects that AI could contribute up to $1 trillion of additional value annually to the global banking sector. The Evident AI Index, which ranks banks based on their readiness for the forthcoming AI revolution, places JPMorgan at the top, with U.S. banks holding seven out of the top 10 positions.

Following the announcement of the AI assistant, Morgan Stanley's stock price rose by 0.4% on Monday, contributing to a year-to-date increase of 3.49%. This growth comes in spite of a volatile period for the banking sector in March. In comparison, JPMorgan's stock has surged by 10.36%, while Goldman Sachs and Citigroup have seen declines of 0.8% and 6.8% respectively.

In unrelated news, Morgan Stanley is currently embroiled in a lawsuit with private equity firms alleging fraud in a high-speed rail company investment. The firms accuse the bank of defrauding them out of at least $750 million, a charge that Morgan Stanley vehemently denies.

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