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BlackRock plans to roll out generative artificial intelligence tools to clients in January as part of a larger drive to use the technology to boost productivity, the $9.1tn asset manager told employees on Wednesday.
The world’s largest money manager said in a memo to staff that it has used generative AI to construct a “co-pilot” for its Aladdin and eFront risk management systems. Clients will be able to use BlackRock’s large language model technology to help them extract information from Aladdin.
Companies around the world are racing to use generative AI to create new products and mine proprietary data for financial advantage. BlackRock, which already draws more than 8 per cent of revenue from technology services, is aiming to get ahead of its asset management peers.
“GenAI will change how people interact with technology. It will improve our productivity and enhance the great work we are already doing. GenAI will also likely change our clients’ expectations around the frequency, timeliness, and simplicity of our interactions,” according to the memo from Rob Goldstein, chief operating officer; Kfir Godrich, chief innovation officer; and Lance Braunstein, head of Aladdin Engineering.
BlackRock is also building tools to help its investment professionals gather financial and other data for research reports and investment proposals, as well as a language translator, according to the memo. Additionally, in January, it will start deploying Microsoft’s AI add-on to Office 365 productivity software across the company.
In all cases, the AI would be producing “first drafts” that must go through normal quality control, and all data would remain inside BlackRock’s “walled garden” rather than being shared with users of open access generative AI programmes, the memo said. The firm also aims to use the technology to democratise coding more broadly.
BlackRock executives believe that using AI this way will help the money manager cut fixed costs and boost margins. “Large language models and automation allow us to really scale the time and energy of our people, such that we can drive more productivity gains into 2024 and beyond,” Martin Small, chief financial officer, said at the Goldman Sachs US Financial Services Conference on Tuesday.
Other financial services companies are also experimenting with AI tools both internally and for clients. Several banks, including Bank of America and Wells Fargo, offer AI-powered chatbots to help retail customers manage their finances.
Citgroup is using large language models to improve developer productivity and test for software vulnerabilities — but not for credit scoring or other applications that affect customer access to financial products, chief executive Jane Fraser said Tuesday in prepared testimony for a congressional hearing.
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