Generative artificial intelligence (AI) is taking the world by storm. It’s impacting virtually every industry, from healthcare and education to software development and engineering.
Recently, we talked a bit about whether and when marketers should use generative AI. To recap, while AI cansave time, enhance creativity and give a deeper insight into customer behavior, trends and preferences, it also lacks authenticity, is prone to inaccuracies, and can often do more harm than good.
The bottom line? AI’s usefulness varies wildly from one business to another.
That brings us to a more specific question: Should you consider using generative AI in a heavily regulated industry … like investor services?
Let’s talk about it.
Why Generative AI Is So Appealing
On the surface, generative AI almost seems like magic. With just a couple of prompts, it can help you write a blog, create social media posts, even analyze complex data.
Among other benefits? You can tweak AI to fit your firm’s voice. You can also use it on the back end to analyze the type of content that your current investors enjoy most, and that is most successful in targeting new investors.
Given this ability to speed up timely insights and maintain the constant engagement that clients demand (and deserve), it’s easy to see why some investors services firms might see generative AI as a way to improve their marketing efficiency.
For all its perceived benefits, however, there are a few considerable hitches in AI’s get-along.
Chief among them? Accuracy — or, more specifically, a lack thereof.
AI Is Not Infallible
Inaccurate market data. Misleading claims about investment products. A factual error that a human would have caught but AI couldn’t.
All of these are very real risks that come with using generative AI. And in an industry where accuracy is not just crucial, it’s mandated, even small errors can have disastrous consequences.
Generative AI might be good at delivering fast results, but speed means nothing if the information is incorrect.
Part of the problem is that generative AI works on dated information. Generative AI programs like ChatGPT have “cutoff dates,” meaning they’re not trained on information past that date — often months if not a year or more in the past.
Also problematic is that generative AI notoriously “hallucinates,” which is confidently delivering incorrect answers to queries – and in many cases, they misunderstand or even fabricate the sources they cite. Even the best generative AI programs have hallucination rates of 3% to 5%, which is more than enough opportunity to create inaccurate statements. And that could erode trust with current and prospective clients.
It’s not just about the data, either. Sometimes, the results AI generates won’t align with your existing messaging or tone, leading to a disconnect that your audience will notice and (rightly) attribute to AI usage.
AI Can Cause Compliance Issues
AI-caused inaccuracies don’t just make you look unprofessional and jeopardize trust with your audience — they can also get you in regulatory hot water.
The use of AI by investor relations personnel increases compliance risk related to the following prohibitions of U.S. securities laws: Companies and their employees cannot make any untrue statement of material fact or omit a material fact about the company in connection with the purchase or sale of the company’s securities. Publicly traded companies cannot selectively disclose material non-public information about the company to certain third parties without sharing that information broadly with the investing public (“Regulation Fair Disclosure” or “Reg FD”).
U.S. securities laws dictate strict rules and regulations about what can and can’t be said in investor communications and marketing efforts. Your content is legally required to be clear, fair and not misleading. Consider SEC Rule 10b-5, which prohibits making “any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading.”
It doesn’t matter whether generative AI created inaccurate materials — if you sign off on them, you’re ultimately responsible. ChatGPT won’t serve your time or pay your fines.
So you have to ask yourself: Are the time and effort savings worth the potential reputational damage and regulatory ramifications?
The Final Word
When used responsibly, generative AI can be a powerful tool for marketers. But in investor services, the consequences for missteps are severe. If you choose to use gen AI, proceed with caution — and make sure you have at least one set of human eyes look over anything the technology spits out!
Are you looking for real-world, human-centric marketing solutions for your investor services firm? Mischa Communications has the experience to help and the accolades to prove it. Let’s talk business.