Web: How AI is transforming the financial industry

September 2015 by: From The Web

More and more, financial firms are turning to machines to do the job humans have done for decades.


Last spring, wealth management firm Charles Schwab launched a new service called Schwab Intelligent Portfolios. The service is unique in that it's not a person who decides where to invest your money, it's an algorithm - lines of code programmed into a computer.


"It's lower cost for the investor," says Tobin McDaniel, who leads the Schwab Intelligent Portfolios team.


"As opposed to working with a traditional advisor where you might pay up to 1%, here you get portfolio management at essentially no management fee."


To get started with Schwab Intelligent Portfolios, you answer a short questionnaire aimed at determining your appetite for risk and your investment goals. Algorithms then create a portfolio suited to your profile and manage it on a daily basis.


Instead of simply crunching numbers, the machines are now making decisions.


And that increasingly describes the rest of the financial system.


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