Artificial intelligence (AI) is a new era in software development. Until now, software was limited to automating different types of repetitive tasks, but AI has brought a high level of intelligence, creating a solution that can handle even those jobs that require human creativity and ingenuity. Many jobs are at risk of being automated with the help of AI.
The job of a financial analyst is susceptible to automation because a lot of it requires crunching large amounts of data that AI can do faster. However, a financial analyst is not only limited to analyzing raw data. The job involves more contextual understanding and complex financial decision-making that AI cannot replicate. There are many reasons why AI cannot replace financial analysts.
Related: How can AI can be used in Financial Analytics?
Clients Seek Personalized Solutions
Clients facing financial problems seek custom solutions based on their financial goals, risk tolerance, and life goals. They look for someone who is competent in financial analysis and understands other life issues that people face. They are not yet ready to trust robots and automated financial analysis and decision-making solutions.
They prefer financial analysts who understand multiple factors, from personal issues to age, health, and investment growth prospects. AI takes decisions based on the previous data as fed into it by the operators. It cannot look at the issues with empathy and from the human angle that a financial analyst can do.
Financial Analysts Establish a Good Rapport with the Client
AI is robotic and simply takes data and spits out the result immediately based on the programming done in it. There is no personal communication or emotional attachment to the client’s condition and situation. That is not the case with a financial analyst who uses communication skills to build a professional relationship with the client. The analyst uses interpersonal skills and communicates complex financial concepts in an easy language the client can understand. AI is impersonal and does not connect with the client like a financial analyst does.
AI Struggles with Nuances
While AI can calculate quickly and even make sense of big data, it struggles to make a nuanced understanding of information, situations, and contexts. Some situations require empathy and creativity. Sometimes, a financial analyst has to consider the social, political, and economic contexts when making financial decisions. AI does not make decisions based on such nuances. It simply crunches data and delivers the result without considering various factors affecting a person differently.
Financial Analysts Are Creative and Adaptive
This is a big advantage they have over AI, which is limited to fixed solutions based on the fixed parameters set in its programming. On the other hand, a financial analyst is creative and can come up with unique solutions based on the specific problems a client is facing. The analyst is adaptive and can adapt based on the circ*mstances, region, laws, and other factors. AI, unless updated regularly, is unable to adapt for each client.
Related: How to become a Financial Analyst?
Financial Analysts Have Skills and Expertise in Other Areas As Well
While they excel in their core competency area of financial analysis, they also have skills and expertise in many other fields. For example, a financial analyst may have an excellent understanding of accounting, project management, personal finance management, or other subjects. It helps them offer their services to a particular group of clients, such as corporate, individual investors, institutional investors, or government departments.
AI takes a macro view by taking an average of everything. It does not have the problem-solving and analytical skills at the level of a financial analyst who can interpret financial and investment trends and patterns. This rigorous analysis helps the analyst make more practical decisions.
AI Is Another Tool Financial Analysts Are Using
Rather than see AI as an adversary out to take their job, financial analysts have started using it to their benefit the same way they had dumped paper bookkeeping and opted for more efficient software-based bookkeeping and accounting operations. AI is an excellent tool financial analysts can use to make sense of vast amounts of data. Now, they are no longer limited to only calculating large numbers of data.
They can also make sense of the big data and make informed decisions for their clients. They are also using AI for many related applications, such as preparing document drafts, contracts, and client assessments. AI has only improved their capability and given them more power to offer better client services.
Challenges Financial Analysts Will Face Due to AI
As they become more skilled and efficient in delivering their financial analysis services by using AI, fewer financial analysts will be able to do the jobs of more of them. They can offer more accurate investment, financial decisions, and predictions, improving their income. AI will make them more reliable as they make successful predictions and handle more complex financial analysis tasks.
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Conclusion
AI will not replace financial analysts, but it may reduce the number of such professionals as they become more efficient, effective, and reliable by using AI, machine learning, and other transformative technologies. AI is good at making sense of vast amounts of data and information but lacks empathy, communication skills, and an understanding of human factors. This deficiency will ensure the financial analyst’s job remains secure.
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