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AI is more than a buzzword; it's a strategic imperative for modern investment management firms. The ones who embrace it early will come out on top. But where do you even get started? And how can you ensure you are best leveraging a powerful but novel technology?
Ridgeline has been using AI for well over a year now. Internally, we have applied AI technology for things like writing code, idea generation, streamlining processes, and creating the image that accompanies this blog. By January 2024, we had rolled out the Ridgeline Assistant in the Ridgeline product; a generative AI-enabled assistant that helps customers navigate our software. We've seen impressive productivity gains in both internal and external applications and exponential potential for greater efficiency.
We have learned a lot in the course of launching what we feel is a strategic and responsible AI program. Because many of the firms we talk to are at varying stages of AI-readiness and looking for practical advice, we wanted to share some of the considerations that have guided our program development.
Responsibility and Governance
One of the challenges for a highly-regulated industry like investment management is data sensitivity. We didn’t want any of our data or our customers’ data to be used to train large language models. In evaluating AI tools, we enhanced our standard vendor review process to reflect our top concerns: protecting sensitive data and the possibility for AI hallucinations.
Creating an AI tools policy and development framework to address those issues were among the earliest tasks of Ridgeline’s Responsible AI board. The board consists of key functional leaders and executives who provide governance and guidance for the use of AI at Ridgeline.
As you think about architecting your own program, we recommend involving several cross-functional stakeholders from areas like tech, business, legal, and compliance to ensure that responsibility and innovation co-exist.
Technology and Data
Ridgeline feels that a good AI strategy relies on a great data strategy. Machine learning and generative AI require massive amounts of data - especially proprietary data - to give it true intelligence. So for AI to be effective, data must be broken free from outdated, disjointed systems that lack context and don’t have the proper security controls.
Ridgeline’s cloud-native platform was built from day one with a unified data model described by metadata and fine-grained security access controls. Because of that, customers are able to have governance and control of their data as it is used by generative AI.
Another advantage of Ridgeline’s unified platform approach is that it is a single control point for moderation, auditing inputs/outputs, and enforcing our Responsible AI program’s policies.
A platform approach allows firms to leverage data effectively and securely.
Security, Regulation, & Integrity
We’ve all seen the news recently where investment advisors were charged with making false and misleading statements around their use of AI. Understandably, many firms are concerned about misstepping with AI and coming under the scrutiny of regulators.
While the industry awaits clear guidance from regulators, there are a few ways that we recommend protecting your firm and your clients:
- Document everything you do related to AI
- Establish oversight committees and protocols for development and deployment of AI at your firm
- Take security and risk measures to protect client data
- Ensure your suppliers and tech providers maintain strict standards for protecting client data
- Keep up to date with news around AI regulation, as it is rapidly evolving across industries
Ridgeline has an enterprise agreement with OpenAI, which is one of the clear leaders in AI. Our agreement reflects our high standards for security, including the fact that OpenAI can’t train on our data or our customers’ data, and, like all of Ridgeline’s data sub-processors, they must be SOC2 compliant.
Make sure you’re working with partners that allow you to confidently engage with regulators and support your ability to be both innovative and compliant.
What does this enable?
With the right AI program in place, you can unlock exciting creativity and efficiency gains for your team. Ridgeline employees across the company are turning to ChatGPT Enterprise for use cases as varied as engineers writing code, the HR team onboarding new employees, and the legal team analyzing documents. We feel that the possibilities for unlocking innovation are endless. (Case in point: in one 24-hour company-wide R&D blitz, Ridgeline employees built over 50 prototypes leveraging AI!)
For Ridgeline’s customers, this translates to drudgery removed from their day, significantly expedited workflows, and a team that is freed up to focus on value-driving work and deepening client relationships.
It is still early days for AI and the investment management industry is on a collective journey to embrace this powerful new technology. Wherever your firm is with its AI adoption, we’d welcome the opportunity to talk about your goals and how Ridgeline’s AI program and learnings can become part of your firm’s competitive advantage. Just send us a note at hello@ridgelineapps.com.
